According to a study conducted by Ernst & Young on behalf of the Interactive Advertising Bureau, the US digital advertising industry has lost a startling $8.2 billion through corruption—due mostly to invalid traffic, infringed content and malvertising.
In the report, “What Is an Untrustworthy Supply Chain Costing the Digital Advertising Industry?” of which MediaMath was a premier sponsor, EY suggests “that an increase in some fundamental practices, such as knowing your business partners and investigating new relationships using address information, tax IDs and background checks, is critical.”
Some key findings include:
- Invalid traffic from non-human actors, such as brand safety bots and search engine spiders, are costing advertisers the most—with a loss of $4.4 billion this year. With regards to consumer consumption, 72% of ad fraud costs happen through desktop usage and 28% are from mobile use.
- Infringed content represents the most significant portion of lost revenue opportunity costs, with a loss of $2.4 billion. In efforts to reduce this number, the study suggests improving technology and bandwidth so that consumers can obtain content more easily, rather than resorting to content that’s illegally distributed.
- Lost revenue from malvertising—fraudulent ads, deceptive download ads, viruses—accounts for $1.1 billion, with $781 million lost from malware related ad blocking alone.
Click here to download the paper in full.