How ad fraudsters are sucking the life and dollars from Australia’s digital ads

In times of economic uncertainty, every marketing dollar counts. As Australia (and the rest of the world for that matter) “flirts” with a recession, marketers have their hands full with hamstrung budgets and ever-increasing pressure to do more with less. The last thing any marketer needs is a worldwide group of fraudsters covertly siphoning away their hard-earned budgets which in essence makes the budget process even harder to justify for the next year.

Every year, cybercriminals deploy armies of robots (bots) that mimic human behaviour online. Their goal is to artificially make it appear as if digital ads displayed on websites or apps are getting clicks when in reality they may not have been viewed by a single human.

Ad fraud is nothing new: as far back as 2016, the World Federation of Advertisers predicted that ad fraud would become the second-largest market for organised crime. And their prediction may just be coming true. Seven years later, ad fraud remains an unstoppable force that has cost advertisers US$81 billion in 2022 and potentially US$100 billion this year.

When left untreated, ad fraud leaves marketers with a mess of skewed statistics, poor conversion rates and up to millions of advertising dollars wasted. What is worse is it has a snowball effect on other stakeholders such as shareholders, staff and the community.

A dedicated approach

If we are to go back to how we go here. It was this poor state of affairs that led us to found TrafficGuard in 2015. Originally beginning life as an Australian Securities Network-listed Ad Network, TrafficGuard was a byproduct of a growing problem under an adjacent business. Having experienced ad fraud first-hand, we knew others would also suffer the same effects.

Upon seeing how our efforts impacted business positively, we then decided to create a full suite of tools to analyse impressions, clicks, conversions and events to mitigate ad fraud at its earliest reliable indicator. And it soon became apparent after our launch that in order for us to excel as a business, we also needed to expand our horizons to the rest of the world.

Naturally, this led to us recruiting a diverse team from around the world, all of whom brought their own driven and dedicated approach to tackling ad fraud across Asia Pacific (APAC). Almost eight years later, ad fraud remains a perennial problem both globally and in Australia.

Since 2018, the costs of ad fraud have increased by a whopping 186%. Australia itself has witnessed an incredible rate of technological innovation and digitisation over recent years, with mobile finance and e-commerce usage surging during the COVID-19 pandemic. These all leave marketing and security teams with an ever-increasing surface for fraudsters to attack.

Today, desktop videos in Australia receive the highest fraud rates, surpassing mobile video, which has previously been the top target. To mitigate these risks, protection is required across all platforms. When deployed, these solutions ensure that ads serve the publisher, advertiser and client. As an example, we recently found that the percentage of Google Ads budget spent on invalid traffic was 20.8% during a sports betting audit in Australia.

Furthermore, a global statistic from suggests that almost 26% of the world’s population bets, and the global market is expected to grow from $76.79 billion to an impressive $127.45 billion by 2025, according to Research and Markets. On average, we see up to 25% invalid traffic during the detection period for top affected verticals in Australia, these include the following; sports betting, e-commerce and telecommunications.

So what does this mean for our client who was affected by 20% invalid traffic: To put it into numbers, our prevention solution unlocked about A$780,000 worth of budget on a $4m spend per year. Every dollar not siphoned away by bots is another potential client reached.

So that $780,000 worth of invalid traffic is now reinvested into valid traffic to drive more users. Our solution is real-time prevention, ensuring that every possible cent of a marketing budget hits its targets. True full-funnel capabilities analyse data and enrich it with the intelligence gained from analysis across its universal fraud prevention suite. This helps reliably identify sources of invalid traffic, eliminating invalid clicks and improving conversion rates.

Of course, it’s not the savings generated that really matters, it is the ability to apply those savings back into a campaign to deliver you real valid users and then what the life time value of those users are to you, that is the alue of TrafficGuard and that is what our clients see.

When grouping the removal of invalid traffic, the extra conversions you get from replacing this with valid traffic and then combining this with all the data and insights the platform give you, all of these help maximise the brand’s budget efficiency and provide a solid platform in which you use to optimise your spend and boost your return on ad spend (ROAS).

This means being free from bot-infested results, murky metrics and futile optimisation plans. These serve to achieve an advertising campaign’s objectives and return on investment.

What 2023 will mean for ad fraud

2023 could be the year when long-term consumer concerns over data privacy, protection and transparency finally come to fruition. Marketers will be preparing themselves for Google’s elimination of third-party cookies and for when the Consumer Data Right comes into effect. This will see the end of marketers’ unfettered access to third-party browsing data and user behaviour. It is designed to give consumers greater access to and control over their data.

In light of these privacy moves, the advertising tech industry is set for significant disruption, with marketers needing to find new ways to measure performance. More pressure will also be placed on publishers to deliver transparent, reliable and trustworthy advertising experiences as contextual advertising emerges as a replacement for user behaviour tracking.

Another major trend Aussie marketers need to be aware of is the rise of affiliate marketing. Affiliate marketing, an arrangement in which affiliates receive a commission for each visit or sale, is expected to grow from US$13bn in 2022 to US$15.7bn by 2024, according to Influencer Marketing Hub’s Affiliate Marketing Benchmark Report. Despite its widespread popularity, the affiliate marketing industry still faces a variety of challenges and pain points.

Affiliate fraud is on the rise, and it is estimated that the affiliate marketing industry is expected to lose over US$3.4bn to fraud. When brands are hit by ad fraud, they not only lose money but also customer relationships. If advertisers cannot reach clients and deliver value, they risk losing them to competitors. This trust between brand and consumer is critical in 2023. Clients now expect more from brands; they would want to feel heard, recognised and important.

In a report by Salesforce, 84 per cent of customers say that being treated like a person, and not a number is important in winning their business. Digital advertising has allowed brands to connect deeply with their customers with hyper-personalisation across multiple channels. But if these customers are being superseded by bots, these connections will never materialise.

Because of these trends, TrafficGuard is now focused on improving our omnichannel solution, encompassing a multitude of platforms and social media channels, while creating a self-serve product designed for Australia’s huge base of small-to-medium-sized businesses. Ad fraud is not going away any time soon. If anything, fraudsters will only get more sophisticated.

However, using comprehensive ad verification and fraud prevention will help put brands one step ahead of the bots, ensuring every ad dollar spent hits the right spot: their bottom line.

Mathew Ratty is the Co-founder and Chief Executive Officer of Adveritas. Mat is based in Australia and has been in the digital advertising tech industry for the last seven years. He has also led the strategy of bringing Adveritas’s main product, TrafficGuard, to market whilst building out his C level executive team. Trafficguard is currently headquartered in Australia with a growing presence across Asia.

Matthew Ratty,Co-Founder and Chief Executive Officer of Adveritas