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Risks and Ad Fraud Protection In Digital Advertising

By Cecily Uhlfelder and Robert DeWitte
September 01, 2024

Fraud accounts for 22% of yearly digital advertising expenditures, according to Juniper Research, resulting in losses of up to $84 billion for advertisers annually. Notice programs in the settlement context are not immune from this danger. Class counsel has a fiduciary duty to protect the best interests of the class, therefore protecting notice programs and the effectiveness of a digital advertising campaign is critical. Further, the recent tidal wave of suspicious claim filing may be connected to advertising (ad) fraud as well. Counsel would be remiss to brush aside concerns over ad fraud in favor of cheap digital notice campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.

The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. In contrast to historically traditional methods where actual real people negotiate prices and placements, programmatic advertising has largely taken over. This automated process of buying and selling digital online space — which takes a mere two hundred milliseconds to complete — involves the use of software and algorithms to manage real-time auctions, where marketers bid for ad space on websites, mobile apps and other digital platforms.

While revolutionizing the means of transacting digital advertising buying and selling, programmatic advertising (which currently comprises over 90% of U.S. digital display advertising) has greatly contributed to the current digital environment, now ripe with opportunities for ad fraud.

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