Digital Advertising Frauds to Cost $100 Billion to Brands This Year: What it Means for Online Marketers in 2023

Ad frauds drain brand campaign resources. Regardless of what the ad platforms claim, this menace often proves fatal for brands and their marketing efforts.
January 14, 2024

Between 2019 to 2020, mobility giant Uber filed lawsuits against six ad networks, namely Fetch, BidMotion, Taptica, YouAppi, AdAction, and Phunware Inc, and won. For the 2019 instance, it claimed that the ad companies were fraudulently generating traffic costing it nearly $100 million. In the case of the 2020 instance, they discovered that the majority of app installations delivered by the ad company were the result of a fraudulent method called click flooding.

The incident with Uber is just one of the many digital advertising frauds that brands, regardless of their size, are dealing with daily. Cybercriminal Aleksandr Zhukov and his group of fraudsters reportedly made three to five million a day by executing fake clicks on video advertisements before it came to light in 2016. Among others, the victim list included The New York Times, Nestle, Comcast and The New York Post. 

Digital ad spend in 2023 was projected to be $679.8 billion as compared to $614.48 billion in 2022. Unfortunately, costs related to digital advertising fraud are expected to similarly grow from $35 billion in 2018 to $100 billion in 2023. This is both alarming and distressing for brands marketing online.

The usual victims: Haunted by Ad-frauds

Needless to say, businesses marketing online are primarily at risk of advertisement frauds. These brands actively spend on digital ads often relying only on the performance data provided by the advertisement platforms. Ad frauds derail marketing campaigns by gravely misrepresenting these metrics. It also increases the cost per click (CPC) for brands and impacts their ad score. If left unchecked, brands might end up draining all their digital advertising budget without ever reaching their target audience. 

For brands that use social media platforms to campaign, the statistics on ad fraud is worse. Global ad spend of social platforms is estimated to be $224 billion in 2024 and 64% of it is expected to be spent on Meta.On the other hand, Meta reportedly removed 1.3 billion fake accounts from its platform in the fourth quarter of 2022. While not all of these fake accounts might be bots, Meta in its statement claimed that they consider these fake accounts to be created with malicious intent.

Exploring not-so new grounds: Brands go the alternative way  

With such concerning figures it is only natural for brands to be on the lookout for a channel/platform rooted in the fundamentals of transparency with a promise of a safe environment for them to carry on their marketing operations. But the nature of social media, and the internet in general, is such that user anonymity becomes an asset and transparency for advertisers an impossible luxury, at least not until some kind of user verification can be implemented.

In this search for trustworthy online marketing channels, brands have been actively experimenting with methods like partnership with influencers(a new generation twist to the age-old Two-step flow of communication theory), Search Engine Optimization(trying to crack how search engine algorithms work) and affiliate marketing(a revenue sharing model predating the internet). While brands have been successful to get favourable results from these approaches, each has their own fair share of pros and cons. Moreover, they do not directly address the primary issue brands face, i.e, Advertising frauds.

Brand-Bank marketing: Hope that glimmers on the horizon

Given the nature of the challenge, the most effective solution seems to be centred around two primary objectives:

  1. A mechanism to advertise to a verified audience in a brand-safe environment
  2. Transparency in the form of data that translates the efficacy of the said mechanism

Advertise to a verified audience in a brand-safe environment

The first objective is achievable by partnering with platforms which have a large number of verified users at any point of time. And nothing fits the bill like banks. 

Banks are especially known for their well-scrutinised onboarding of users, often filled with requests for government-issued identity documents which in turn are supported by other personal verified information. This automatically means that every customer accessing its digital channels, be that mobile banking applications or e-banking websites, are verified users of that bank. Such measures ensure a bot-free environment making the channel safe for brands to conduct digital marketing. 

Brands can also benefit from such a partnership as the relationship between customers and their banks are founded on the principles of trust. The global bank customer satisfaction survey by Statista revealed that trust was the most valued aspect of banking for consumers across 32 nations worldwide. During the same study, consumers gave roughly four index points out of five to reveal they were overall satisfied with the trustworthiness of their banks. 

The benefit of such a partnership between brands and banks is evident but building a platform for promoting brands within the banking channels from scratch is not always the first choice of banks. Also, resources spent by both brands and banks on implementing, managing, coordinating and measuring such promotional activity can never be a win-win situation.  

Transparency in the form of data to measure ad platform’s efficiency

The second objective calls for innovation in the advertising space to facilitate accuracy in sourcing data to provide business intelligence. Such a system would require advanced technological know-how and development of auxiliary services to fully cater to the requirement of advertisers. Banks seldom invest on such technology independently and brands cannot feasibly implement such methods.

Cheggout is a 100% bot-free ad space

Cheggout provides the exact solution to the problems faced while implementing the two primary objectives. On the one hand, partnerships between brands and banks are 100% implemented, managed, coordinated and measured by Cheggout and on the other hand, it provides business intelligence based on the principles of transparency. This means no extra work for brands and banks and effective campaigning for higher return on investments (ROI) driven by data.

In August 2023, Amazon and Godrej ran campaigns on e-banking and mobile banking channels  using Cheggout. The banner ads delivered 10x the expected impressions and a very high click through rate(CTR). Internal study also showed the clicks were highly intent-driven. At the end of the day, it was a win-win for both brands and banks. Both gained by leveraging each other’s offerings and fulfilling each other’s needs to the maximum. That in a nutshell is what Cheggout offers.

Cheggout is an innovative solution for brands to advertise in a bot-free, fraud-proof environment by partnering with India’s top banks. At a time when ad-fraud is showing no signs of ceasing, online marketers can surely explore Cheggout and engage with over 375 million verified customers instantly.