Industry anti-fraud efforts save advertisers $10.8 Billion in 2023

The digital advertising industry's concerted anti-fraud efforts dramatically reduced losses due to Invalid Traffic (IVT) in 2023, saving advertisers an estimated $10.8 billion in U.S. display and video ad channels, according to a new study released on October 9, 2024. The research, conducted by the Trustworthy Accountability Group (TAG) in partnership with the 4A's, Association of National Advertisers (ANA), and Interactive Advertising Bureau (IAB), highlights the significant impact of industry-wide anti-fraud initiatives.

Key Findings of the 2024 US Ad Fraud Savings Report

The study revealed several crucial insights into the effectiveness of anti-fraud measures:

Potential Losses Without Anti-Fraud Standards

According to the report, without industry anti-fraud programs in place, the IVT rate for all display and video advertising in the U.S. would have been approximately 9.96% in 2023. This translates to potential losses of $11.78 billion, based on a blended IVT rate for unfiltered inventory across four MRC-accredited vendors.

Dramatic Reduction in Actual Losses

The implementation of broad anti-fraud standards held U.S. IVT losses to just $979 million in 2023, a 92% reduction compared to estimated losses without those standards in place.

Substantial Savings for the Industry

The difference between potential U.S. IVT losses ($11.78 billion) and actual losses ($979 million) resulted in an estimated $10.8 billion in savings for the advertising industry in 2023.

Widespread Adoption of Anti-Fraud Measures

The vast majority of U.S. digital ad spend for video and display advertising in 2023 flowed through companies that had earned TAG's Certified Against Fraud Seal, which recognizes compliance with multiple industry anti-fraud standards.

Historical Context and Industry Collaboration

Ad fraud has been a persistent issue in digital advertising for years. A 2015 study by the IAB and Ernst & Young found that $4.6 billion was lost to ad fraud in the U.S. during the prior year. Another analysis in the 2018/2019 Bot Baseline study from the ANA and White Ops projected the cost of ad fraud in 2019 to be $5.8 billion globally.

To combat this issue, the ad industry's leading organizations launched a multi-pronged strategy, which included:

1. Development of "Invalid Traffic (IVT) Detection and Filtration Guidelines" by the Media Rating Council (MRC)
2. Launch and expansion of the TAG Certified Against Fraud Program by the 4A's, ANA, and IAB
3. Dissemination of innovative tools and standards such as Ads.txt and Sellers.json by IAB Tech Lab

These programs secured support from hundreds of companies across the digital advertising supply chain, resulting in IVT rates being reduced to less than 1% worldwide in TAG Certified Channels (TCCs).

Industry Reactions

Mike Zaneis, CEO of TAG, emphasized the importance of the findings: "Over the last decade, industry anti-fraud efforts have succeeded in reducing IVT rates to a low, predictable, and manageable level, but until now, we haven't known exactly how valuable those programs have been."

David Cohen, CEO of IAB, highlighted the role of industry collaboration: "The tools and frameworks developed by IAB Tech Lab and codified as part of TAG's certification programs are the foundation of our industry's anti-fraud success, and these results show that our collective efforts are paying off."

Marla Kaplowitz, President & CEO of 4A's, stressed the ongoing need for vigilance: "While the industry has come a long way, fraudulent activities continue and evolve to take on new forms. It requires the ongoing diligence of groups like TAG to identify and minimize fraud in the advertising ecosystem."

Bob Liodice, CEO of ANA, emphasized the practical impact: "Real savings mean real results, and this report demonstrates the impact of our industry's anti-fraud programs in redirecting billions of wasted dollars from criminals and fraudsters to effective and productive ad campaigns."

Methodology

The study evaluated the savings resulting from the digital advertising industry's implementation of anti-fraud programs by determining the total amount that would have been lost to IVT in 2023 in video and display advertising channels without those programs in place, then subtracting the amount of remaining IVT-related spending in channels with robust anti-fraud standards.

Looking Ahead

While the reduction in fraud has saved advertisers billions of dollars, ongoing support and expansion of cross-industry defenses are necessary to maintain these gains and adapt to new forms of fraud. Continued collaboration across the industry remains vital to ensure that the digital advertising ecosystem remains secure.

Key Facts

• $10.8 billion saved due to anti-fraud efforts in 2023
• 92% reduction in IVT-related losses compared to potential losses without standards
• 9.96% estimated IVT rate without anti-fraud measures
• 0.92% actual IVT rate in channels with anti-fraud standards
• Over 90% of U.S. ad spend flowed through channels with anti-fraud standards