Forecast: Ad fraud to push $35 billion this year

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According to their experts digital ad fraud will cost businesses about $35 billion the year in direct costs with another $5 billion in indirect costs through diverse economic and social costs. If their forecast is correct, digital ad fraud will surpass credit card fraud, which stands at $27 billion.

“The level of ad fraud is now staggering. The digital advertising sector has the unwelcome distinction of having higher fraud rates than multi-trillion-dollar sectors including healthcare, credit, and insurance. Though there has been much industry progress to stamp out fraud in digital advertising, the systemic complexity, competing interests, and sophistication of attacks particularly during a recession, have made the ecosystem a breeding ground for bad actors,” said Professor Robert Cavazos.

Between the American Presidential election and the push to move business and entertainment online because of the COVID-19 pandemic, experts say it was the perfect storm of opportunity for fraudsters. They believe about $1.3 billion in political advertising will be lost to fraud; similar findings have been found in disparate advertising sectors. However, the experts say that insurance is perhaps one of the focal points, with fraud rates there 1.8x higher than fraud rates in health care and 13x higher than fraud rates in credit cards.

“Despite a tumultuous year for marketers, digital advertising now represents the main destination for ad dollars. In this situation, we see that fraudsters have ready access to the most advanced tools ever available to commit fraud at scale. In addition, incentives to commit ad fraud have only grown due to the economic downturn, creating a perfect storm for digital ad fraud,” said Guy Tytunovich, CEO & Co-Founder, CHEQ.

<a href="https://www.cheq.ai/adfraudcost" More data from the CHEQ report can be accessed here.

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Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
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Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.