The Fake Economy and the Rise of Digital Ad Fraud

The digital ad economy has become one of the largest driving forces in advertising writ large. Over 316 billion dollars are expected to be spent in 2019 alone, a number higher than the GDP of Greece (300 bn). With this much money at stake, clearly one would expect that there is massive regulation making sure this spend is being accounted for properly, right? Well what if I were to tell you that….it isn't.In fact, nearly 10% or 30 billion dollars falls through the cracks every year attributing to global ad fraud. With 30 billion dollars you could afford to buy the NBA's New Orleans Pelicans 30 times over, so why is no one doing anything about ad fraud? It's trickier than you might think.First let's give a baseline knowledge of what ad fraud is. In its most basic iteration ad fraud is the practice of fraudulently representing online advertisement impressions, clicks, conversion or data events in order to generate revenue. However, while financial service transactions are regulated and generally all of the stakeholders are aligned, in one ad transaction there can be up to 20 players who do not share a common goal. Furthermore, with so much digital advertising happening in the world today, digital fraud prevention solutions could face up to 20,000 requests every second.So per day that would be 20,000 * 60 (seconds in a minute) * 60 (minutes in an hour) * 24 (hours in a day) the answer = …..I don't know, that broke my calculator. But the number is large.

Not Your Average Farm

How can one person do so much damage? Well the answer is they can't, but hundreds of people in a click farm can, one fraudulent click at a time. Yes, that's correct there are literally thousands of people all over the world manually clicking ads all day…and you thought your job was boring. Fraudsters use VOIP/burner phone numbers to get around minute security protocols and they're off to the races.Now these fraudsters can really abuse this lack of oversight is by using their VOIP/Burner phones to create fake accounts. Then these fake users can really go wild with fake ads, fake content, heck they can even become fake influencers. That's right, you thought these regular Instagram influencers were awful, just wait until you find out about the fake variety!! This all leads to an entire eco-system, an entire economy that is FAKE.Who is harmed most by ad fraud? Primarily smaller firms that don't have a ton of budget to try to quell this dastardly act. The World Federation of Advertisers has estimated that 30% of digital ads go unseen by actual consumers, a whopping 21 TRILLION impressions annually. Not only does ad fraud hit the advertisers, the social impact such as loss of trust in the industry has hit hard too. Fortune 500 companies such as Proctor and Gamble have recently reduced their digital advertising budget by 200 million, re-appropriated the funds and increased their reach by 10%.

A Mobile Identity Solution

But there is another way to fight ad fraud; mobile identity. By eliminating the problem at its genesis these fake users are never able to hop on a platform and cause mayhem. Global web and mobile platforms have successfully used TeleSign's Mobile Identity solutions globally to block bad actors preventing the growth of the fake economy. By using carrier data TeleSign can provide a layer of extra security to any platform and set up a list of red flags that will banish a fraudster to the swamps from which they came.Ad fraud won't be defeated over night, but together using the power of Mobile Identity we can start to derail it. Digital advertising has proven an effective sales tool for both small businesses and enterprises alike, we can't roll over and quit or be intimidated by fraudsters, instead we fight back.To learn how your platform can use mobile identity solutions to defend against fake users, click here.

Talk To An Expert

Interested in learning about how TeleSign's identity and engagement solutions can prevent fraud while fostering secure and global growth for your business? Let's chat.