Nearly a quarter (22%) of all global digital ad spend, and 30% of mobile advertising spend, will be lost to ad fraud this year, according to the latest study from Juniper Research.
Juniper estimates 2023’s ad fraud damage at $84.2 billion out of global spend of $382 billion, and projects that it will more than double (+105%) by 2028, to reach $172.3 billion of that year’s projected $747 billion in global spend.
“Data provided by popular ad platforms such as Facebook and Google “give an optimistic view of campaign efficiency, failing to distinguish between how many clicks or views originated from legitimate users compared to click farms or fraudulent bots,” says Elisah Sudlow-Poole, senior research analyst at Juniper Research.
Juniper says that datasets from 78,000 unique sources, including comprehensive data from six digital ad channels and data from 45 countries in eight key regions, were reviewed for the analysis. However, no detailed methodology is provided. Juniper *produced the report in collaboration with anti-fraud service Fraud Blocker, and promotes that service at the end of the report.
North America will account for the largest portion of fraud over the next five years (42%), followed by the Far East and China (20%), according to the report.
Looking at channels within the total, fraud will account for nearly 30% of mobile spend, 20% of online display spend, 20% of online search spend, 17% of in-app advertising spend and 15% of online video spend.
In-app digital ad spend will generate the most fraud in 2023 and account for 52% of global fraud by 2028. That reflects its status as the fastest growth channel, projected to increase 135%, from $203.8 billion in 2023 to $479.4 billion by 2028. Advertisers are increasingly using display ads and search ads to trigger app downloads, so higher proportions of subsequent advertisements are being displayed in-app.
Among the three online advertising types studied, search will generate the most fraud over the next five years. Online fraud is most likely to occur within browsers that have a smaller market share, such as Firefox and Edge, or device-specific browsers like Samsung Internet.
Online video advertising generates the smallest proportion of online ad traffic, and its cost has risen — now $0.61 per clickthrough, versus $0.42 for online display and $1.46 for online search — but its higher clickthrough rates are attracting more fraudsters, as well as advertisers.
And while Google denies the recent reports that it has violated its own ad placement and anti-fraud policies, Juniper Research notes that as the largest video streaming platform in the world, the alleged actions could cost advertisers up to $4 billion in spend on YouTube alone in 2023.
Juniper Research also studied social media. The report points out that, because only a handful of social platforms have a large user base, fraudsters can easily generate targeted fraudulent campaigns that can harm advertisers’ return on advertising spend over a relatively small number of channels.
Despite movement away from bots to the use of human workers in fraud detection, click farms continue to inflate social currency and can be used in attribution fraud.
However, Juniper Research estimates that use of fraud mitigation platforms could recover $23 billion of the lost spend in 2023 and $47 billion by 2028.
*Correction: The article originally stated that Juniper Research owns Fraud Blocker, but according to Juniper, it does not own or have any financial interest in Fraud Blocker.