Billions of dollars in advertising down the drain due to fraud

According to a new report, advertising fraud driven by ‘bot traffic' may be costing the Australian economy more than $5 billion each year.

The report, published by The Australian, found that local advertisers could be losing as much as 30 per cent of marketing budgets to ‘fake clicks’.

Deltrix, an advertising auditing product created by Tumbleturn Marketing Advisory, confirmed that ad fraud infiltrates all digital platforms and found that bot activity accounts for more than 50 per cent of internet traffic. Trials with three national clients revealed that 30 per cent of advertising budgets were wasted on fake clicks.

“Ad fraud is a criminal enterprise operating at a global scale, in fact, now the largestcriminal industry in the world,“ Tumbleturn partner Dan Johns told reporters.

“The reality is that standard safeguards, such as pre-bid filtering and legacy bot detection, are simply not enough protection.

“The degree to which ad fraud is now so prevalent refutes the idea that this is a small problem of no more than one per cent of traffic.”

The report noted significant pressure on marketing budgets across a variety of industries. With total online advertising spend in Australia estimated at more than $17 billion last year, analytics expert and creator of Fou Analytics, Augustine Fou, said tackling this issue was paramount.

“There are companies that spend $2 billion in digital every year, worldwide. My take on that is that you could not spend half of that, so $1 billion … goes straight to the bottom line,” Fou said.

“For companies that are struggling with razor-thin margins, they’re lucky if they get a 3 per cent margin at the end of the year.

“If you could save a billion and just drop that all the way down to the bottom line, they could double their profit.”

The increase in advertising fraud is expected to accelerate as artificial intelligence expands.