U.K. advertisers saw an estimated £277 million ($344 million) of their online budgets disappear due to online ad fraud in the second quarter of 2015 alone, according to a new study on global ad fraud. Some analysts suspect that number is actually significantly higher.
Analysts at the media valuation platform Integral Ad Science came to this figure by tracking hundreds of billions of U.K. display advertising impressions across the countries in which it has offices — predominantly France, Germany, U.S. and U.K. It then estimated the amount of waste by subtracting the percentage of fraudulent impressions from the overall ad spend in those countries as projected by the IAB/ MTM’s latest study.
They found that 12.2 percent of all U.K. ad impressions tracked from April to June were fraudulent — accounting for that £277 million figure.
The U.S., Germany and France weren’t far behind.
Video is also seeing high rates of fraud, and these figures don’t even take mobile into account — that will be the subject of next quarter’s report. The report hasn’t split out pan-Europe figures but in the U.K. fraudulent video impressions reached 11.6 percent for the second quarter of 2015 — just slightly lower than display.
That said, there has actually been a reduction, albeit marginal, in fraudulent ad impressions compared to the first quarter of 2015. The U.K. saw a slight drop from 12.9 percent in the first quarter, while Germany and France’s fell from 11.2 percent and 10.4 percent respectively.
Although it’s not an exact figure, applying these percentages of fraudulent impressions to the total online ad budget estimates for 2014 for France and Germany from the IAB’s latest AdEx report, gives a ballpark idea as to the amount wasted (see graph below).
Integral Ad Science’s U.K. managing director Niall Hogan told Digiday the £277 million in waste might actually be even bigger than estimated, though, given it is based on the 2014 annual budget spend. “It has been forecasted to be 20 percent higher this year so that figure is probably closer to £320m,” he added.
It’s not just bot fraud where advertisers are losing money, but also in related areas such as viewablity, online misplacement and the subsequent brand safety issues – all of which come under the overarching issue of “media quality.”
On viewability, the U.K. performed the best, with 55 per cent of impressions classed as in-view. Integral Ad Science strips out the fraudulent traffic before tracking what’s viewable, so the figures should be a fair representative. The U.S, France and Germany were all below the halfway mark.
Ad misplacement has been a thorn in the side of advertisers for some time, with cases ranging in severity from ending up on porn sites, to appearing on reputable sites but next to news-related or user-generated content that is inappropriate for certain brands. A classic example was when Nissan and Nationwide were forced to suspend their advertising from Facebook in 2013 so as to distance themselves from user-generated content on topics including rape and domestic abuse. Barnett University had to follow suit when it saw its own recruitment ads surface on YouTube against Jihadist videos last year.
Integral Ad Science also provided a snapshot of how display media fares on open exchanges and network environments compared to deals made directly with publishers. The former found to be the worst perpetrators, accounting for 13.6 percent of fraudulent impressions in the U.K. A total 6.3 percent of U.K. ad impressions found fraudulent came from direct-to-publisher deals, so not using open exchanges.
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