Study: Adtech Fraud Costs Advertisers $7 Million Per Month

More than 1,200 websites are defrauding advertisers of $6.8 million per month, according to a new study.

The sites use copyright-infringing material, the authors of the study tell us, and, "The ad impressions from this traffic are ‘laundered’ through a complex series of redirects that make the ads appear as though they originated on legitimate sites containing advertiser-friendly content."

Most of the fraudulent ads served are never actually seen by users. They are "served" in ways so that they don't actually appear in a user's browser. The problem affects 3% of all "programmatic" ads served in automated auctions on real-time bidding networks. About 0.1% of impressions bought by publishers seeking exposure on the third-party sites are effected.

The study, by DoubleVerify, indicates that rates of fraud in web advertising are lower than many have previously assumed. RadiumOne previously estimated that fraud cost advertisers $400 million a year, much more than DoubleVerify's $81.6 million estimate.

However, DoubleVerify's numbers dovetail with data from Spider.io, which found $6 million spent in fraudulent clicks per month.

DoubleVerify's claims include one obvious flaw: The company named only two websites serving bogus impressions — Icefilms.info and DIYchef.com — and didn't name any advertising clients affected by them.

DoubleVerify declined to comment when asked about these omissions.

Download the report here.