In 2023, eMarketer projects that ad fraud will reach a staggering USD$16- billion, doubling the losses experienced in 2019.

Even more conservative estimates by Business Insider suggest ad fraud could range from USD$40-billion to USD$100-billion in the same year. These figures should not be taken lightly, as they have significant consequences for advertisers.

So why aren't ad tech platforms effectively combating this issue? One of the reasons is the challenge of scaling operations while maintaining thorough oversight. Ad tech platforms often operate on a business model that takes a percentage of every transaction, making it difficult to thoroughly vet every participant.

Consequently, trust becomes a crucial component of their systems, allowing publishers to join while providing mechanisms for their removal in case of complaints.

Google, for instance, claims to have taken action against ad policy violations in 2022. The company reports having blocked or removed over 5.2 billion ads, restricted more than 4.3 billion ads, and suspended over 6.7 million advertiser accounts due to egregious policy violations.

It has also removed ads from 1.5 billion pages and updated 29 policies for advertisers and publishers. Although these numbers are impressive, they might not be sufficient to address the extent of fraud within the system.

But how exactly does ad fraud work? Criminals sign up as publishers on online platforms that provide them with code to insert into their web pages. This code displays ads and attributes revenue to the publisher for each view or click.

The criminals then employ programmatic bots — thousands of automated bots that visit real websites and click on ads before proceeding to fake websites to click on more ads. Alternatively, they create sensational headlines and share them through social media and low-cost advertising, enticing people to click on these pages.

This fraudulent activity is incredibly inexpensive to execute, with many ads on each page, even though a significant portion may not be visible to users. Nevertheless, the criminals manipulate the systems in a way that still ensures payment from the advertisers.

To make matters worse, these fraudulent activities occur on an enormous scale, often involving billions of interactions, and are further amplified when the "bad actors" leverage AI technology.

While there have been efforts to combat ad fraud, such as the development of Trustlist by Code for Africa, an NPO, and DYDX, through a Google Lab Grant, these initiatives can only provide partial solutions. Trustlist, currently in Beta, aims to detect fake advertisers based on historic ad spend, reducing the risks associated with supporting fake news and reputational damage from ad fraud.

However, it is clear that a more comprehensive approach is needed to address this widespread problem.

So, what can advertisers do to protect themselves? Advertisers need to adopt a more critical mindset when analysing the numbers presented in their reports from agencies and programmatic providers. They must actively implement anti-ad fraud measures and develop strategies to mitigate reputational risks.

Blindly trusting that platforms are always in control of their ad inventory is no longer a viable option. In the words of the Roman poet Juvenal, "Who watches the watchmen?" In this case, it falls upon the advertisers themselves to be vigilant and safeguard their interests.

By taking proactive measures and leveraging appropriate technologies, advertisers can minimise their exposure to fake news and advertising fraud, protecting their advertising spend and preserving their brand reputation in an increasingly challenging landscape.

For more information, visit www.dydx.digital.com.