$75 Billion is lost per year in ad fraud/waste. We define “lost” as: spent with no possibility of seeing any return. The digital marketing industry is worth $155 Billion annually, and growing fast. With $75 Billion lost, this means that nearly half of that is wasted on fraudsters and extremely low quality media buy platforms.
Here are some shocking stats:
38% of banner clicks are accidental
61% of Internet traffic is non-human
77% of display ads are never seen
36% of all ad traffic is considered fake
57% of video ads are never seen
86% of consumers suffer from banner blindness
8% of internet users account for 85% of all online clicks
50% of traffic buyers are unable to detect non-human traffic
and here are 50 more Digital Ad Fraud stats that we compiled
Our research has led us to believe that the root cause is the lack of transparency in buying and selling ads. The root problem and reason for this appears to be that no one trusts each other, and for good reason.
Advertisers lose money due to fraud, and then everyone loses. As many know all too well, the vicious and perpetual cycle goes like this:
- Advertisers understandably react to losses caused by fraud and waste by reversing revenue on publishers. Too often however legitimate publishers are damaged by illegitimate reversals.
- To compensate for these losses, many publishers react by advertising aggressively and deceptively to consumers, causing legal issues and brand damage to advertisers.
- Based on advertiser claims (and often without evidence) ad networks react to advertiser chargebacks by banning publisher accounts and seizing revenue to offset unilateral reversals.
- User experience is greatly diminished as this war plays out around us (as evidenced, in part, by record numbers of ad blocker installations).
With so much dysfunction, there is only one real solution: a fully transparent marketplace. Transparency naturally expands trust, and trust quickly scales marketplaces. Imagine a fully transparent ad exchange that uses intelligent algorithms and performance conversion metrics to ensure maximum value exchange for marketplace buyers and sellers. The net effect is automated high-value trading inside a trusted environment. Fraud and waste can’t exist, and legitimate buyers and sellers can easily detect and scale winning campaigns.
So long as data is hidden from buyers and sellers, ad fraud and ad waste will continue to grow. Based on our research and extensive consideration, the only real and permanent solution is full transparency between advertisers and publisher.
We are building all of our new technology and reformatting all of our old tech to be fully transparent. We encourage all ad-tech platforms to consider doing the same, as we believe this natural evolution of the industry will simply require that eventually.
We recommend that advertisers and publishers find ad platforms that prioritize transparency above anything else. Many use this word “transparency”, but few deliver; so be cautious and ensure that providers actually deliver on these promises.
We believe one day – likely sooner than most imagine – there will be nowhere for fraudsters to hide and no way for platforms to sell junk. The only question is, will you be able to adapt (and thrive) in this new open data transaction model?
If you want to evolve and thrive well into the future, it’s simple: drive your internal activities to require and utilize deep insights/data from your partners, and ensure that external partnerships are built on (and accountable to) an open and transparent engagement.
It may not be easy (what worth doing is?), but always remember that it’s simple: fraud and waste can only survive in darkness; stability and growth comes through transparency.
We’re excited about this evolution in digital advertising, and fully committed to this emerging community and the marketplace it powers. If you’re excited too, feel free to reach out to myself or anyone else at tribe.
