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Why Ad Fraud Estimates Vary

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You may have noticed that the global estimates listed above have a very wide range—the largest estimate is nearly double what the smallest estimate was. The question is “why do estimates of ad fraud vary so much?”

There are a number of reasons why some organizations might provide different estimates for the global cost of ad fraud than others.

Some of the potential reasons include:

Different Data Sources. Different organizations might be pulling their data from separate sources. For example, one organization might base its estimate on a global corporate survey of different businesses. Then, they establish the average cost of ad fraud against the average online marketing spend for the companies surveyed and extrapolate that against the global spend for online ads. If another organization does the same thing with different companies, they might come up with a completely different number.

Not All Ad Fraud Gets Reported. Not every victim of ad fraud reports the event. In some cases, an organization might not want to report that they’ve fallen victim to a fraudster. Others might simply not know that they’ve been defrauded of their ad spend—assuming that the leads they’re getting are genuine. Whatever the reason, unreported ad fraud can bring down the estimated cost to the economy. So, any studies that don’t account for unreported ad fraud may undershoot the actual figure by a large margin.

The Cost Categories in the Report. Some estimates of ad fraud may use different cost factors when assessing the economic impact of such fraud. For example, one report might simply focus on the wasted ad spend alone. Meanwhile, another report might include labor time lost pursuing bad leads, the cost of increased spending for ads that aren’t actually working, TCPA violation fines, and projected loss of business from reputational damage or reduced customer conversion rates.

Any one of these factors could be a reason for two different estimates to have differing results.

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