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Ad fraud has quietly become one of the biggest financial drains in digital marketing. It is no longer just a technical glitch or a background issue. It is a global economy of deceit that bleeds billions from advertisers every year and fuels profits for some of the largest tech platforms in the world.
It is now hard to overlook this issue due to recent findings. Meta, the parent company of Facebook, Instagram, and WhatsApp, estimated collecting almost $16 billion from ads connected to scams and prohibited commodities, according to internal corporate records examined by a media outlet. That amounts to about 10% of its yearly income.
These ads were not isolated mistakes. Meta’s systems reportedly showed around 15 billion high-risk scam ads every day across its platforms. Even when the company’s internal systems detected suspicious behaviour, many of these ads continued to run. The documents suggest that Meta made about $7 billion every year from these questionable advertisers.
The company apparently charged higher ad charges for marketers suspected of running false ads, which is even more concerning. Meta's system turned possible fraud into profit by raising their advertising expenses rather than outlawing them. According to another internal document, Meta makes almost $3.5 billion every six months from fraud advertisements that pose a greater legal risk, such as those that impersonate public personalities or brands.
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This exposes a major moral and economic dilemma for the digital advertising world. While global regulators debate over tighter rules, fraud continues to grow unchecked.
The Growing Economy of Ad Fraud
According to Statista, global ad fraud losses hit $88 billion in 2023. They are expected to reach $172 billion by 2028. That means losses will almost double in just five years.
Fraud is predicted to affect between 20 to 30 percent of all digital ad spending in 2025. Resulting in every five marketing dollars may never reach a real person. Rather, it goes to invisible clicks, phony websites, and bots.
The effects are severe for advertisers. Consider investing ₹100 in a campaign and losing ₹20 due to fraudulent traffic. Over time, the loss affects not just campaign outcomes but also business expansion.
The Indian Picture
India’s digital advertising industry is booming. It is now worth ₹49,000 crore, growing at 20 percent every year and holding 44 percent of the country’s total advertising market.
But the growth comes with a hidden cost. Industry experts estimate that around 10 percent of digital ad budgets in India are lost to ad fraud and invalid traffic. That means an estimated ₹4,900 crore is wasted each year.
A recent study conducted by mFilterit demonstrates how pervasive the issue is. Affiliate networks in India report that 43% of traffic is invalid. Partner networks account for 21%, video ads for 17%, and programmatic ads for 31%. Even on social media, which is frequently thought of being safer, 9% of traffic is invalid.
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Compared to Europe and the US, India’s rates are far higher. This shows that the country’s fast-growing digital economy is also becoming a major target for fraudsters.
How Ad Fraud Works
Ad fraud happens when ads are shown or clicked by bots instead of humans. It can take many forms. Some fake websites copy the layout of real publishers and sell ad space that never reaches a real audience. Some click farms use thousands of devices to generate fake clicks. Others use AI-powered bots that can scroll, watch videos, and even fill forms, making them almost impossible to detect.
According to Statista, invalid traffic (IVT) currently makes up about 11% of all digital ad activity worldwide. One in five clicks on a sponsored search ad may occasionally be fraudulent.
Fraudulent clicks also skew analytics. They inflate the perceived success of campaigns. When in fact they are paying for digital ghosts, marketers mistakenly believe they are receiving engagement.
Who Suffers and Who Gains
Ad fraud hurts everyone except those who benefit from the system.
Both money and trust are lost by advertisers. When fraud is discovered and ad payments are revoked, publishers lose money. Additionally, fraudulent traffic lowers ad revenues for reputable publications, making it more difficult for them to maintain their companies.
Meanwhile, large digital platforms still earn revenue from every impression and click, real or fake. This imbalance has led many experts to describe ad fraud as a “hidden tax” on the digital economy.
Read On: Brands train AI guns against fakes, frauds and farms
North America is predicted to suffer the most losses, followed by Europe and Asia-Pacific. However, growing markets like India are currently experiencing the biggest growth in fraudulent activities. Fraudsters follow the money, and India has become an easy target due to its quick transition to digital.
The Role of AI in the New Fraud Landscape
Fraudsters are using generative AI to create fake content, deepfake videos, and false testimonials that look legitimate. They can now automate large-scale ad scams faster than ever.
But AI is also helping the fight back. Google suspended 39.2 million advertiser accounts in 2024 using AI-based fraud detection, triple the number from the previous year. India has seen a 36 percent drop in ad fraud rates this year due to the use of AI verification tools, according to DoubleVerify’s Global Insights Report.
However, scammers develop new strategies for every new defense mechanism. Activity moves to another area when fraud detection is better in one. For this reason, in 2023, India surpassed the United States as the nation with the highest rates of ad fraud.
The Road Ahead
The war against ad fraud is far from over. With global losses rising toward $172 billion, the need for transparency and accountability has never been greater.
Cleaner ad supply chains, independent audits, and more stringent verification are starting to be demanded by brands. Regulators are advocating for harsher sanctions. However, the problem still exists since prevention is expensive, fraud is profitable, and technology is developing more quickly than regulations.
For advertisers, the question now is not whether ad fraud exists. It is how to prevent it from quietly consuming their budgets and corrupting their data.
Automation and trust were the cornerstones of the digital ad industry. However, as the Meta example demonstrates, the system itself becomes a deception when profit takes precedence over protection.