For any brand looking to engage with consumers and get their messages out into the market, ad fraud is a major challenge – and one that has proved hard to beat. Due to innovations in the adtech sector, however, telcos have an opportunity to help solve this challenge, opening a lucrative new revenue stream in the process, while also ensuring that their own advertising dollars are not lost to fraud.
From financial losses to brand damage – the consequences of ad fraud
The financial implications alone make ad fraud an urgent problem. It’s estimated that digital ad fraud cost businesses approximately $100 billion in 2024 alone, with projections suggesting this could more than double to $172 billion by 2028 if left unchecked.
As well as draining advertisers’ budgets, ad fraud undermines the integrity of their campaigns. When ads are displayed on made-for-advertising (MFA) sites or in non-viewable locations, advertisers lose the opportunity to engage with their intended audience. All the hard work that goes into messaging and creative is wasted.
Additionally, having ads appear on inappropriate or harmful sites can severely damage brand reputation and trust. This misplacement risks associating a brand with undesirable content, potentially alienating customers and undermining brand values.
A recent study by WARC revealed that advertisers are pouring millions into substandard ad placements that compromise brand safety standards. A significant 60% of advertisers and agencies surveyed by WARC identified this as a major concern, with 56% prioritising improving advertising verification capabilities as a result.
How ad fraud works
In many cases, bots lie at the heart of ad fraud. Fraudsters deploy bots to simulate real user interactions on websites and apps, generating fake traffic that appears legitimate. These bots click on ads, visit pages, and sometimes fill out forms, creating the illusion of engagement and interest.
Bots thereby trick advertisers into paying for advertising space based on inflated traffic and engagement metrics that don’t represent genuine human activity. As a result, advertisers end up spending on ads that are never actually seen by potential customers.
Alternatively, fraudsters place ads on websites without the publisher’s consent or establish counterfeit websites that resemble legitimate ones. Advertisers spend money on what they assume are reputable sites, only to have their ads appear on unauthorised or substandard sites, or in some cases, not displayed at all.
In all cases the con is the same: advertisers believe that the right, human audiences are viewing their content, when this is not in fact the case.
How telcos can help
Telcos can help address this challenge through new verification services aimed at the advertising and publisher ecosystem.
Telcos are in a unique position. Their network intelligence provides a complete view of the sites that real, human web users visit, and even the devices they use to access these sites. If used in a way that complies with data privacy and security laws, then this treasure trove of intelligence can be used to verify the audiences that are exposed to brand messages.
Here’s how it works: First, brands and publishers create an identifier on their sites. They then securely share these anonymous IDs with telco partners, who leverage their network intelligence to verify that these IDs correspond to an anonymised known subscriber, without any subscriber information leaving the telco network, in effect providing assurance that the user is human and not a bot.
Telco verification can also power a second, transactional ID. This ID enables programmatic campaigns to be activated while providing advertisers the peace of mind that the audiences they are engaging are attributable. As well as protecting against bots, this method ensures that advertisements are seen by the right audiences, helping improve ROI and ensure brand safety.
The benefit to telcos
With telco-verified IDs, advertisers can finally get a grip on the ad fraud challenge, using intelligence that’s 100% verified at source. Telcos have the opportunity to offer a significant new tool in the battle against ad fraud, one that will protect advertisers’ budgets while increasing the accuracy of their campaigns.
Telcos stand to benefit too. By providing verification services, telcos can bring online a new revenue stream in the lucrative marketing sector. Telco-verified IDs not only promise to address ad fraud but also offer the advertising industry a privacy-centric source of intelligence to drive personalised advertising at scale. At a time when traditional advertising signals such as tracking cookies are coming under stress, such new approaches will be met by a highly receptive audience.
Finally, it’s worth remembering that telcos are advertisers themselves. By using telco-verification IDs for their own campaigns, telcos can also reduce the impact of ad fraud while increasing the accuracy and reach of their campaigns – a vital consideration given the hyper-competitive nature of the telco market.
Ad fraud, therefore, is a significant challenge for advertisers, but a clear opportunity for telcos. By creating a new role for themselves as verification hubs, telcos can open a significant new revenue stream and claim a place at the heart of the digital ecosystem.
