Marketers are expected to lose $4 billion (€3.7bn) in 2020 due to OTT ad fraud, a global economic study by CHEQ has revealed.
The ‘military-grade cybersecurity company’ has released a report about the scale of ad fraud in the fast-growing OTT market, undertaken with economist Roberto Cavazos, a professor at the University of Baltimore, using the latest economic analysis, proprietary CHEQ data, and expert interviews.
The study calculates that ad spending in the OTT advertising market will hit $23.8 billion in 2020, as advertisers increasingly invest in fast-growing ad-supported streaming platforms globally. Based on data across billions of OTT impressions, CHEQ estimates that advertising fraud levels are at 17%. Set against global spend, the report reveals that economic waste from ad fraud in OTT will hit $4billion in 2020. Left unchecked, at current rates of growth, the report finds that marketers will see losses from OTT fraud rising to $5.2 billion in 2021.
The study finds that the high CPMs in the sector of up to $40 are attracting sophisticated fraud. The most common OTT ad frauds involve networks of bots generating massive amounts of fraudulent traffic. Fraud techniques include misrepresentation of geography, and device-based frauds where a single device reports a high number of ads, alongside app-based fraud. Server-side ad insertion fraud (SSAI) used to deliver video content is also being exploited by fraudsters, who use machines to mimic these proxy servers which can often appear harmless given that SSAI is so common in the ecosystem.
There is also widespread copyright infringement and ripped-off content. CHEQ fraud experts have blocked illegal streaming sites from attempting to hijack content of legitimate OTT video players and seeking to monetize the content through ads.
Professor Roberto Cavazos, University of Baltimore, said: “As we see more global OTT growth in 2020 with almost weekly announcements of services, and a larger ad-based inventory, economic detriment is inevitable. Ultimately, OTT advertising is still a very fragmented territory with lack of transparency and high payoffs, making it a breeding ground for deception and fraud.”
Guy Tytunovich, CHEQ Founder and CEO, said: “Marketing budgets are steadily flowing to OTT, offering a mouthwatering proposition of brands being able to reach consumers on their screens with relevant messages at the right time. However, as with other nascent markets online, ad fraud and fakery follow, and every day we are seeing new and sophisticated attacks attacking the OTT ecosystem. The challenges of ad fraud must be tackled if we are to create trust, transparency and efficiency in this fast-growing market.”