How much ad fraud is there? What effects is it having? The&Partnership and content verification specialist, Adloox, have joined forces to launch a new investigation into the scale and impact of ad fraud.

Is that really necessary? Well, yes, according to Adloox. The information it has gathered suggests that the extent of adspend wasted globally each year on fraudulent websites and views is likely to be larger than has been reported.

Johnny Hornby, founder of The&Partnership, noted, “New formats of fraudulent activity are appearing all the time and, as the strategies behind them become more sophisticated, the risks to brands and publishers increase. From our conversations with Adloox, we have reason to suspect the amount of global adspend going to waste each year on fraudulent websites, non-human views and through content fraud may be higher than recent reports, such as the US’s Assocation of National Advertisers’ $7.2bn, suggest.*

“According to Adloox, these reports may even have underestimated the problem by as much as 50%. If this is the case, we must get to the bottom of it – which is why we’re partnering with Adloox to launch a new study, investigating whether ad fraud is costing our clients even more than we are aware, and outlining the implications for brands, publishers, tech companies and the media industry.”

Marco Ricci, chief executive officer of Adloox, added, “Our early insights suggest that a significant proportion of fraud is going undetected – even by other specialists – and that the scale of the problem could even be twice as high as previously reported. Much deeper auditing of ad campaigns, and more stringent health checks on supplier sources of audience traffic are needed if we want to get to the bottom of ad fraud, and stop the problem growing.”

Since 2009, Adloox’s Fraud Forensics team has specialised in pre-bid content verification. It weeds out fraudulent websites and non-human users, preventing a bid before it even takes place on the programmatic exchange.

Adloox is the UK content verification partner for media agency m/SIX, which is a partner in The&Partnership. Together, Adloox and m/SIX have reduced non-human traffic for clients such as TalkTalk to less than 0.3%, far below the industry benchmark of 10-15%. Adloox has also increased viewability for its clients to nearer 75%, far above the ‘accepted’ benchmark of 40-50%.

Ricci explained, “Although almost all major brands have some form of verification policy in place, many of them are only ‘monitoring’ their viewability scores on a post-bid model after the automated sale has already taken place, and not taking into account that the fraudsters are skewing their viewability.

“The reality is most post-bid verification policies are failing to track the majority of fraudulent malpractice. This is because most of the fraud is hiding deeper than the website or ‘declared domain’ level, and only by pre-emptively excluding the deeper, hidden fraud via a pre-bid strategy will we see uplifts in performance.

“We need to move away from top-line brand safety scores and meaningless benchmarks of acceptability, and start verifying the underlying symptoms of fraud, to catch and blacklist fraudsters before they become a problem for brands.”

*In January 2014, the USA’s Association of National Advertisers partnered with cyber-security company White Ops to launch ‘The 2014 Bot Baseline Report’. The study concluded that, in 2016, the advertising industry globally could lose $7.2bn to bot fraud.