By Media & AdvertisingFOXBusiness

Ad fraud is costing companies billions, but there are signs that the digital ad market is improving.

Media buyer, GroupM, released a report this month that puts the cost of ad fraud at $22.4 billion globally.

The report says a large level of fraud hurts companies as well as investors. The report explains that fraud typically accounts for 10% of ad sales spending with the U.S. accounting for $2.496 billion of that fraud while China seems to be the largest offender with a fraud market responsible for $18.75 billion in unethical ad sales.

“Not only is this a concern about wasting their shareholders’ money, but also about the moral and ethical issues of funding harmful and illegal practices such as digital piracy and crime syndicates,” says the report.

Ad fraud is an intentional effort to deceive measurement companies in an effort to make invalid traffic or robotic traffic appear human Joe Barone, GroupM Managing partner, told Fox Business

“It is impressions that are masquerading intentionally as human behavior, he said. “Sometimes it is bot farms, sometimes it is all technology, sometimes it is cell farms with people clicking on it.”

But the Association of National Advertisers, or ANA, has seen improvement during the past two years. The ANA said there has been an 11% reduction in fraudulent ad buys between 2017 and 2019, according to the report released earlier this year.

Economic losses due to bot fraud are expected to total $5.8 billion globally this year, but for the first time ever more fraud will be stopped in 2019 than will succeed, according to the fourth Bot Baseline report from White Ops and the ANA,” says the ANA report which adds, “The monetary losses, while significant, are an improvement over the $6.5 billion reported in the previous study released in 2017.”

Tamer Hassan, Co-founder cybersecurity company of White Ops, explains in the report which his company helped produce in conjunction with the ANA the turnaround in fraud, “We are coming off a year of unprecedented industry collaboration that has proved to be a powerful tool for tackling ad fraud at a global scale.”

Social media and YouTube continue to be a breeding ground for fraud with challenges faced by the media giants in battling fraud >>> READ MORE