• by Tobi Elkin  @tobielkin, April 4, 2016

Programmatic marketing software provider DataXu on Monday released the findings of a report that shows the auto, CPG and telecom sectors were most impacted by ad fraud in 2015. The report also found that new fraudulent methods are being adopted to wreak havoc on advertisers including impression arbitrage, rapid auto refresh and below-the-fold video.

"Far from being close to eradication, ad fraud is thriving on the growth of digital advertising and is set to penetrate even more parts of the ecosystem across 2016, as our new report reveals," said David Shapiro, VP of corporate & business development, DataXu, via email. "Ad fraud is an exploding issue that taints the entire supply chain, threatening to undermine everything we, our partners and clients work so hard to build." Shapiro described ad fraud as a media supply chain issue because it impacts advertising performance and undermines marketer's trust in digital advertising.

Notably, the report showed that the auto sector was the vertical most impacted in 2015 with average fraud rates of 22.8%, followed by CPG (18.5%), telecommunications (14.8%), finance and entertainment (both 12.1%), alcohol (9.5%), retail (8.7%) and tech (8.2%). The Association of National Advertisers projected that ad fraud will cost up to $7.2 billion in 2016.

The DataXu findings are part of the programmatic marketing software provider’s Programmatic Quality Report Series, “The 2015 Advertising Fraud Report.” 

The report comes as DataXu released a full year of data around its 97% Fraud-Free Guarantee in the first installment of its Programmatic Quality Report Series. The company analyzed all campaigns run through its platform to find that DataXu limited fraud to an average rate of 2.85% in 2015, compared with average industry rates of up to 30% on open exchanges, 17% on networks and 7% on publisher direct buys. DataXu launched its 97% Fraud-Free Guarantee in January 2015. The Guarantee pays credits to clients that identify fraud above a 3% level across their media investments in any given month.

Shapiro told Real-Time Daily that DataXu has "tightened" its supply chain and "terminated supply relationships where necessary due to the issue of inventory quality."  He said the company will continue its "Defense-in-Depth" approach across devices and across formats. "As an industry, we need to work together to be one step ahead of those who are taking away from [the digital advertising industry] and taking advantage of how successful it really is," he said.