Listen to this post about ad fraud:

As you read this, advertisers around the world just lost $51 Million to ad fraud. That’s the average. $51 Million lost to ad fraud every day. And the majority of the public still doesn’t know about.

“Ad Fraud is at ALL TIME HIGHS both in RATE and in DOLLARS… and what’s worse is fraud detection is not catching it, so people have a false sense of security.”

– Dr. Augustine Fou; State of Digital Ad Fraud Q2 2018

It’s the perfect crime. The victims never really know they’ve been robbed and the perpetrators are rarely ever caught, let alone charged.

If you’re a digital marketer, here are the Top 10 Stats about Ad Fraud that YOU need to know and what they really mean…

Top 10 Stats about Ad-fraud8% of internet users account for 85% of all online clicks

Let’s say that there are only 100 people using the internet. Of those hundred, 92 aren’t clicking ads. Maybe once in a blue moon they’ll click on a banner that really piques their interest but it’s rare. The other 8 however, are clicking on pretty much everything they see.

Does that sound right to you?

What’s more likely: that there’s a small minority of internet users who are legitimately interested and eager to click on the ads they see while surfing, or that this small minority is spamming websites with fake clicks (that you pay for) for profit?

But “users” can mean a whole lot of different things…

51.8% of all web traffic is not generated by humans

This little nugget of gold comes courtesy of Imperva Incapsula, a cybersecurity firm who found that not only is the majority of website traffic non-human, but that most of this bot-based traffic is ‘clearly malicious.’

The mass of online traffic generated from non-human sources grew 21.5% in a single year and it’s still on the rise. With such a small, niche minority of click-happy internet ‘users,’ we have a good guess as to what these bad bots are doing as they jump from site to site.

What does this mean?

Most website visitors are bots. The chances are likely that a nice chunk of your marketing budget is being wasted serving up ads to them and not human beings within your target demographic.

That is, of course, if your ad can be seen at all…

86% of consumers suffer from “Banner Blindness”

Can you remember the most recent banner ad you saw? Only about 14% of people can. Most users have developed a blind spot for ads. Ads pass by without awareness. We’ve become desensitized to their presence.

How can ads be ignored?

Say you need to grab attention so you put a big banner across the top of a webpage. Seems like the best spot. Except users are used to it, they know the page starts a few inches down and that’s where they start. People avert their eyes from traditional ad locations on instinct now.

Other offenses include noisy pages that bombard users with ads and ads having zero relevance to the content on the page. These abuses go on long enough and users develop calluses. They switch on a mental ad-blocker.

Some ads don’t even get the chance to be tuned out…

77% of display ads are never seen and 60% of legitimate ad inventory is not viewable per IAB standard

It doesn’t take an advertising genius to come up with this golden rule for display ads: they should be displayed.

How is an ad not seen? Spammy clickbait sites have two common tricks. To cram extra ads onto a single page, scammers will scale them so small that they’re imperceptible to the human eye. The microscopic ads are still on the page though so it counts as a display all the same. Another scheme are pop-unders, browser windows opened behind the window you’re viewing, and host ads there.

Seventy-seven percent!

That’s 3 out of 4 ads you pay for being shown to nobody. That’s paying a dollar for 23 cents worth of legitimate ad space. That’s a lot of money down the drain.

But there’s a problem with legitimate space too…

43-46% of web ads are displayed to “suspicious” visitors

For every trustworthy internet surfer, there’s an untrustworthy one. Typically, the highest levels of suspicious activity in the display category originates from China, Venezuela, and Ukraine (Singapore, Macau and Qatar for mobile traffic).

A lot of suspicion, naturally, is on the robot uprising.

Web and mobile traffic is riddled with bots stealing user information, spamming, and phishing. For advertisers, these bots are running up the ad impressions you pay for and lowering your ROI.

Bots are bad but humans are clumsy…

38% of clicks on online banner ads are accidental

Call it fat fingers. Whether it’s a clumsy user navigating a small mobile screen or ads placed where they’re hard to avoid, many ads were never meant to be clicked.

To declare a click was made by mistake, let’s say it’s anytime the post-click content is abandoned in less than 2 seconds. Clearly that’s a visit the user didn’t want to make. In a study by GoldSpot Media using this standard, static banner click through rates of 3.1% were adjusted to a more accurate 1.1%.

That’s a hard discrepancy to shrug off when you’re footing the bill. Sure, accidents happen, quite often actually.

And sometimes it’s not an accident…

30% of internet transactions are marked as fraudulent

You know the news stories.

Compromised records, breached privacy, stolen identities. It’s happening more and more and the really big one is apparently still to come. Hackers and saboteurs consistently threaten the legitimacy of online transactions.

At best, fraudulent traffic merely eats into marketing budgets. I hope you have a good return policy. But what if you get hit hard? It’s bad press. It’s a betrayal of the public trust.

There’s also fraud offline, in your workplace…

85% of companies are already victims of fraud

Hopefully you trust your employees or coworkers but facts are facts.

The Economist calculated that 85% of companies suffer fraud in the office. Stealing office supplies or trade secrets, embezzling company funds for personal use, the bribes and kickbacks involved in tendering contracts with suppliers, and skimming from receipts and petty cash. All added up, fraud eats up an average 7% of turnover.

The rate is even higher for small businesses. Even worse, occurrences of fraud and the dollar amounts involved are both increasing.

Those are some sobering numbers. It seems that from every angle, digital advertisers are getting ripped off.

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Matt Gallant

About Matt Gallant

I'm a seasoned, serial entrepreneur who’s built 13 profitable companies. My 20 years of advertising experience has prepared me perfectly for tribeOS. Over 8 million leads captured, over 13,000 marketing experiments performed, over $10 million spent on digital advertising, and over $40 million generated in online sales. My single-minded purpose is to create the most profitable advertising marketplace ever for advertisers and publishers.

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