To the tune of more than $20 billion annually, fraud is laying waste to the world of online advertising and marketing, according to a global economic study led by University of Baltimore Professor Roberto Cavazos for the cybersecurity company CHEQ. Marketers are contending with a digital ad ecosystem with "little regulation, connectedness or disincentive against fraud,” Cavazos says in an article in Ad Age. Improving the situation, he says, will require "honest and robust methods."
Based in Tel Aviv, CHEQ's mission is "to help sustain the digital ecosystem by protecting leading advertisers from the risks of online advertising and helping them restore confidence in the space," according to Cision's announcement about the article. The report, "The Economic Cost of Bad Actors on the Internet: Ad Fraud," finds that while direct global economic costs of advertising fraud are estimated to be around $23 billion, the true economic and social costs may climb to $30 billion. As many as 30 percent of digital ads are affected by fraud, and the associated costs are expected to continue to climb during the next few years.
"I have studied the economic costs of fraud in many sectors for decades," Prof. Cavazos said, "and I was left stunned by the scale of fraud in online advertising."
The complexity of the online ecosystem, combined with a volume of online ads that reaches into the tens of trillions, has established a situation that is utterly susceptible to massive fraud, he says.
Read the Ad Age article.
The study was cited in The New York Times.
Learn more about Prof. Cavazos