• by Laurie Sullivan  @lauriesullivan, October 9, 2024

For the first time, a joint study spearheaded by Trustworthy Accountability Group (TAG) measured the entire digital advertising spend to estimate the fraud rate for invalid traffic (IVT).

The joint study -- brought together by TAG with American Association of Advertising Agencies (4As), Association of National Advertisers (ANA), and Interactive Advertising Bureau (IAB) -- determined that by working together the digital advertising industry collectively saved an estimated $10.8 billion in 2023, dramatically reducing fraud related to IVT in U.S. display and video ad channels by 92%.

The 2024 US Ad Fraud Savings Report highlights the significant and measurable impact of the industry’s anti-fraud initiatives.

TAG CEO Mike Zaneis said the project began about six months ago.

He said the sheer size of savings is remarkable, but stopped short of saying “we solved ad fraud," adding: "That would never be the case, but people will be surprised to see that the actual amount of money lost to ad fraud is less than $1 billion.”

Estimates put the IVT rate for all display and video advertising in the U.S. at approximately $11.78 billion in 2023, based on a blended IVT rate of 9.96% for unfiltered inventory across four MRC-accredited vendors. 

The difference between the potential U.S. IVT losses of $11.78 billion and actual losses of $979 million resulted in an estimated $10.8 billion in savings in 2023.

Interestingly, the data shows that more than 90% of U.S. ad spend went through channels with standards -- those that had earned TAG’s Certified Against Fraud Seal, which recognizes compliance with multiple industry anti-fraud standards. 

Zaneis attributed the collective industry to decreasing fraud. There is no silver bullet for advertising fraud and no single company can do it, he said, but AI will help.

“This is one of the few times the complexity of the ad ecosystem is working to our advantage,” he said.

For example, an advertiser may have a publisher that uses an ad server that identifies and filters non-human traffic, a SSP that works with an MRC-accredited vendor, and a DSP that works with another accredited vendor. These multiple vendors all filter for fraud and will likely be more successful than any one company.

The losses were estimated on what Zaneis called a “blended average.” Each vendor provided the fraud rate as it observed for clients, and an unfiltered and unoptimized fraud rate.

Tag introduced a concept it calls “where you measure matters,” because if measured at the publisher level, advertisers will see a lot of nonhuman activity, but that will filter out during the transaction.

The report notes the concern around the industry’s ability to examine search and other closed-off walled gardens.

Even if MRC-accredited solutions exist in those channels, the inability to independently measure and benchmark creates transparency issues.

It explains that the IAB Tech Lab’s Supply Chain Object (2019)11 and Ads.cert (2022) technical protocols that are two standards-based solutions that could significantly contribute to ad fraud mitigation through security and transparency but lack scaled adoption from supply chain intermediaries.

By understanding and enforcing these additional standards, agencies and brands can bolster the existing industry anti-fraud framework through required disclosures of adoption, further instilling even more trust that their ad spend reaches their intended audience through certified channels.