Dive Brief:
- The Interactive Advertising Bureau conducted its first survey of fraud in the U.S. marketing and media industry and found it costs $8.2 billion a year, mostly in “non-human traffic” via fraudulent ads.
- The full loss comes from a combination of ad fraud, malvertising, ad-blocking and pirated content.
- The loss was broken down into two components: incurred costs at 59% and lost revenue opportunity costs at 41%.
Dive Insight:
The Interactive Advertising Bureau joined with EY’s Media & Entertainment Advisory practice and MediaLink to research the estimated cost of an untrustworthy digital advertising supply chain in the U.S. The result of the study was finding a multi-billion-dollar yearly cost to the U.S. media and marketing industry. Ad fraud alone accounted for $4.2 billion of the total figure. Breaking the loss down to type of cost found incurred costs at $4.8 billion and lost revenue opportunity costs at $3.4 billion.
"To help the industry reclaim some of the $8.2 billion in costs, EY believes that improving some fundamental business practices is critical," Nick Terlizzi, partner at Ernst and Young, said in a statement. "Some basics include knowing your supply chain partners and investigating new potential relationships using address information, tax IDs, and background checks."
Further, digital security firm Are You a Human has found bots for sale in traffic previously verified as actual website visitors. And though the costs incurred came mostly from "non-human traffic" via fake ads, per the IAB report, it is important to note that hackers are getting more clever, and marketers need to gear up to combat the growing risks.