The Price of Opacity
Ad Fraud

The price of opacity

Understanding the three critical business ramifications of digital ad fraud

Ad fraud is a significant thorn in the side of digital walled gardens. Compounded by their lack of transparency, the risks extend far beyond missed customer engagement. These issues can lead to substantial financial losses, damage to brand reputation and significant legal complications 

Despite widespread knowledge of ad fraud, marketers may underestimate the extent to which it can negatively impact their bottom line.

 In 2023, digital ad fraud was estimated to have cost advertisers an astonishing $84 billion globally, a figure expected to more than double within the next five years. To put this into stark perspective, VAB found that if the cost of global digital ad fraud was human, it would be the ninth richest person in the world

A brand's bottom line also suffers when its reputation is significantly damaged by the opaque practices of major digital ad-tech walled gardens, which can create severe brand safety risks. Engaging with low-quality ad sites and environments can erode brand value and put up to 20% of the company's valuation at risk

Legally, the ramifications are just as severe, with data misuse and breaches eroding consumer trust, tempting criminal activity and causing substantial fines from regulatory bodies. This underlines the urgent need for marketers to seek transparency and independent verification from their media partners, steering their digital video ad campaigns toward greater integrity and clarity.

The challenges posed by digital walled gardens also extend to consumer perceptions.

The business practices and opaque nature of social media platforms and digital ad-tech walled gardens create advertising environments that can easily frustrate and annoy their own user base, which in turn affects how they may feel about the platforms’ advertisers. 

With 73% of consumers holding a negative view of brands linked to misinformation and 65% willing to stop buying from these brands, the importance of brand safety and brand reputation cannot be overstated. 

Amidst growing calls for greater accountability from the digital walled gardens, the value placed on high-quality video content and the 'halo effect' it generates underscores the critical role of premium advertising experiences in enhancing brand reputation, memorability and outcomes. 

James Rooke, President of Comcast Advertising, underscores the critical juncture at which the advertising industry stands: 

"The industry continues to transform at break-neck speed toward a more data-driven, automated approach to buying and selling advertising. As this transformation accelerates, the value of trusted, transparent and engaging viewing environments has never been more important." 

This serves as a reminder why marketers need to prioritize quality, transparency and ethical considerations in their video and cross platform ad campaigns. In doing so, they not only protect their brands from the multifaceted threats posed by opacity and ad fraud but also align themselves with consumer expectations for integrity and trustworthiness in advertising.

 If you are inspired to demand better for your brand or business, empower yourself with 5 tangible ways to mitigate risk and ensure campaign transparency in 2024 and beyond by downloading Hidden Costs: Three critical business ramifications of digital ad fraud.

Leah Montner-Dixon

Director, Audience & Behavioral Insights

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