Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Media Disruption: Study Shows $6 Billion Stolen From Media Industry

Posted by Tom Foremski - December 18, 2014

ADStudy

Leslie Kaufman at the New York Times, reported on a study by the Association of National Advertisers into the problem of fake ad clicks:

Study Puts a Price Tag on Fake Ad Clicks - NYTimes.com

Fraudulent operators using robots to impersonate people clicking on digital ads will rob the advertising industry of $6.3 billion in 2015, according to a report published on Tuesday.

Foremski's Take:  Reporters constantly write the story of ad fraud as if the ad industry is the victim. It's not, it is the media industry that's losing billions in revenues. The ad industry is an accessory to this fraud.

That $6 billion could have paid for a lot of journalist salaries.

Trade associations tend to err on the conservative side whenever there is a problem, so the scale of the fraud is likely far higher, and there have been estimates of fraud losses as high as $18 billion a year. 

The ad industry knows the fraud goes on and goes along with it because advertisers want the numbers to justify their ad budgets even though they know a quarter to a third of their spend is for bogus traffic. 

The NYTimes story is an example of how the media industry and its leading publishers don't understand the economics of their own business. 

And it is an example of how advertisers are hastening the demise of the media industry by being complicit in the fraud. They are weakening a vital industry that carries their commercial messages. It's lose-lose.

And the media industry is doing nothing about it. Shocking.

- - -

Please see:

The Media Industry Is Blind, Dumb And Dumber: Daylight Robbery - Billions Stolen -SVW 

Why isn't the media industry screaming mad about this?! Instead it is blind, dumb, and dumber about this issue.

The media industry needs to band together to stop ad fraud today. It should insist that its advertisers, the big brands, sign a pledge not to support ad fraud and only advertise on real media sites.

 

Here's How To Put Billions Back Into The Media Industry Overnight -SVW

Suzanne Vranica at the Wall Street Journal reported that between $6 billion and $18 billion is stolen every year in the US  because of ad fraud.  The Secret About Online Ad Traffic: One-Third Is Bogus - WSJ.com

 

Vectors Of Engagement And The Click-Free Digital Economy -SVW

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