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Fraud and bad actors are siphoning Middle East advertising spend

Every link in the digital media chain sees money lost to criminals and sites with clickbait headlines

Billboards in Hyderabad. Billboard advertising is poorly targeted but India and the UAE also top the charts in digital advertising that fails to reach users Peter Horree/Alamy via Reuters
Billboards in Hyderabad. Billboard advertising is poorly targeted but India and the UAE also top the charts in digital advertising that fails to reach users

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Every advertiser’s favourite aphorism, attributed to the American merchant John Wannamaker, highlights a fundamental issue in advertising: not all messaging makes it to its intended audience. 

For example, promoting a female-targeted product in a magazine that is read equally by men and women means that half the viewers are not the target demographic.

The same issue arises with television ads placed during mass-market shows. It is even worse with billboards, where many passers-by may have no intention of purchasing the advertised product.

Even specialised media, like business-to-business publications or enthusiast magazines, can miss the mark.

In theory the digital era – with its automated ad targeting powered by artificial intelligence and advanced programmatic algorithms – should improve targeting. However, this is not the case. Where money is involved, there is potential for fraud, and digital advertising fraud siphons a significant amount from programmatic advertising budgets.

A February 2024 report by tech news outlet ExchangeWire revealed that the Mena region loses approximately $1 billion annually as a result of bad actors in programmatic advertising. 

Additionally fraud-prevention company Pixalate reported that in the first quarter of this year, the UAE had the second-highest rate of desktop web invalid traffic globally, with 44 percent of programmatic ads failing to reach users.

For comparison, India leads at 45 per cent, Japan is at 42 per cent and in the US 28 percent of desktop traffic is invalid.

One challenge in combating ad fraud is the lack of motivation to eliminate it

According to the US Association of National Advertisers (ANA), only 36 cents of every advertising dollar spent actually reaches consumers. A quarter of the $88 billion spent on open-web programmatic advertising is wasted on low-quality or fraudulent impressions.

Advertising fraud can take many forms and is perpetrated by different actors. 

For instance publishers may use bots to inflate view counts on their webpages, generating false clicks and impressions. Bots can also simulate app installations, boosting other ad performance metrics. 

A related concern is made-for-advertising (MFA) content, which often consists of low-quality, AI-generated articles with clickbait headlines. These sites tend to have a high ad-to-content ratio and may include intrusive features such as auto-playing videos.

A mid-2024 report by marketing effectiveness company WARC noted that a significant portion of the open web is filled with low-quality websites and AI-generated content, increasing the risk of ad fraud and brand safety violations.

Finding the will to fight

One challenge in combating ad fraud is the lack of motivation to eliminate it.

Publishers benefit from inflated clicks and views, while media buying houses can fully spend clients’ budgets, securing their commissions and rebates. Intermediaries in the programmatic value chain also profit from high traffic volumes.

Wasted spend affects advertisers directly. However the average tenure of a business-to-consumer chief marketing officer is around four years, with 22 per cent leaving within a year (according to a US survey by executive search firm Spencer Stuart).

Short tenures mean chief marketing officers must quickly demonstrate success. If their findings reveal significant waste arising from fraud, their time in the role may end prematurely. 

A senior executive at one regional fraud prevention company told me much of its business comes from marketing heads who are once bitten, twice shy. Many chief marketing officers who experience issues with ad fraud in one role swiftly enlist prevention experts in their next position.

Anti-ad-fraud companies can assist chief marketing officers in auditing their advertising strategies to reduce losses associated with invalid traffic. They often recommend enhancing transparency within advertising frameworks.

Ad fraud thrives on the complexity and scale of expenditure, as many actors profit at each link in the chain between advertisers and potential customers. 

In a benchmark report from December 2023, the ANA found that the average campaign operates across 44,000 sites, with programmatic algorithms managing ad placements. On that scale, human oversight is unfeasible.

When advertisers encounter MFA sites or those lacking brand safety, such as disreputable or pornographic websites, they can add these to exclusion lists to prevent future ad placements.

However the ANA contends that exclusion lists are largely ineffective. With AI enabling fraudsters to create new sites easily, removing one results in many more sprouting in its place.

Instead the fraud experts suggest using inclusion lists that specify which websites to use, effectively narrowing down the ad placements. A relatively small number of sites generate the lion’s share of views.

Advertisers should closely monitor their spending, either through in-house teams or anti-ad-fraud firms that manage their efforts.

While ad fraud cannot be entirely eradicated, through education and informed investigation, brands can start to at least understand which portion of their spend is truly wasted.

Austyn Allison is an editorial consultant and journalist who has covered Middle East advertising since 2007