In digital advertising, billions vanish to fraud, inflated metrics, and blind trust in ad networks that promise precision but deliver opacity.
“Just trust me, bro.”
Four simple words that, in every context, inspire the opposite of trust. And that’s because trust is earned, and not given.
Except, it seems, when it comes to ad-buying. When a company signs over a significant chunk of cash to their chosen ad network, they have no real control or insight into where their ads ultimately appear.
They can say: “I want to target this demographic, and I definitely don’t want my ads to appear next to this type of content.” And the ad network will reply: “Don’t sweat. Just trust me, bro.”
The ad network may try hard to fulfil the customer’s requests, setting all kinds of rules and barriers and relying on all sorts of sophisticated technology to ensure relevance and brand safety. Yet, there are no guarantees.
Fraud: An Unsolved Problem
Over the past fifteen years or so, we’ve seen a massive shift in people’s online consumption patterns, with PCs and laptops increasingly sidelined by mobile devices. The majority of digital ad spend now targets mobile, with a massive chunk of that going towards in-app advertising.
But there’s a caveat. Many advertisers explicitly don’t target mobile apps, instead choosing to target the mobile web.
There are a few reasons for that. One common example is audience misalignment. If a company sells a product or service to a specific niche—say, healthcare workers—there’s no point in targeting a general-purpose app, where that niche represents a small slither of the total audience.
It could be a matter of brand image and safety. If you’re a luxury brand, you probably don’t want to see your latest product appear on an exploitative free-to-play game that’s monetized through micropayments and a shameless exploitation of gambling mechanics.
For those large brands that do target mobile apps, they’re likely enticed by the relatively low costs. Mobile apps provide high volumes and low CPM rates, meaning you can reach a large audience affordably.
But ad fraud is endemic in the mobile app space with double-digit rates of fake clicks and impressions.
Although not scientific, this recent newsletter from Dr Augustine Fou, owner of advertising analyst house FouAnalytics, is rather interesting. He examined a list of apps where one large advertiser’s content appeared and noticed dozens of examples of fake ads. These apps often had telling names, like “eternal toupee” or “tasty uranium,” or names that were just long strings of random numbers and letters.
Fou describes how these apps would slip through the net with very little scrutiny paid either during the bidding process or after the ad has been served. The nature of mobile ads, which emphasizes volume over quality, effectively enables this kind of fraud.
Arguably, in this case, both the ad networks and the buyers share some responsibility, with the former failing to properly vet their bid requests, and the latter failing to demand higher standards.
But when we look at other segments of the digital advertising ecosystem, we see that things are especially bleak. In 2016, the World Federation of Advertisers estimated that $50B of digital ad spend will be lost to fraud in 2025. That decade-old prediction seems almost conservative when we look at the actual rates by platform, touchpoint and location.
In Q1 2025, 24% of desktop web traffic clicks in EMEA were fraudulent, according to Pixelate. On the mobile web, that figure was 12%.
While that’s bad, it’s still far better than the social media ecosystem. According to Polygraph, a provider of click-fraud prevention technologies, bots account for nearly three-quarters of clicks on TikTok, 61% on Twitter and 57% on Facebook.
Targeting and Trust
Fraud is just one part of the problem. In January, the US Supreme Court allowed a class-action case to proceed against Meta alleging the company overstated ad reach by up to 400%. The class includes anyone who purchased Facebook ads after August 15, 2014. If the plaintiffs prevail, the damages could exceed $7B.
In May, Google agreed to pay $100M to settle a class-action lawsuit claiming it served ads to individuals beyond the target demographic, which raised costs while delivering little-to-no return.
That case involved activity before 2012, so it may not reflect today’s ecosystem. But documents from the DOJ’s recent antitrust case against Google show the company routinely took actions that inflated ad costs for buyers.
The first ruling—which found that Google held monopolies in online search and text ads—revealed how the company restricted ad buyers’ visibility into where their ads appeared. One tactic, “semantic matching,” ran ads against vaguely related queries.
Initially, advertisers could opt-out and only match on near-identical terms—misspellings, plurals, abbreviations — but Google eventually removed that option.This meant ad budgets were spent on irrelevant queries.
This kind of deliberate action boosts Google’s revenue but leaves advertisers in the dark about where ads run.
But inaction can produce the same results. When a social platform cuts back on moderation, brand safety goes out of the window. Ad buyers have no guarantee that their content will appear below posts of a racist or criminal nature, or those that are just unpleasant.
That fear has fueled the massive pullback in advertiser spending on X (formerly Twitter) since Elon Musk’s 2022 acquisition and widespread moderation cuts.
Although we haven’t seen a similar exodus of advertisers on Meta, but its thousands of moderation layoffs have sparked similar fears, albeit in hushed tones.
Digital Advertising’s Unspoken Truth
The biggest lie of digital advertising is that it’s a highly sophisticated, incredibly precise industry. In reality, a significant chunk of all ad spend is lost to fraud each year. The ad networks themselves face credible accusations that they fail to calculate the reach of the ads they serve, and thus overcharge customers.
And then, to add insult to injury, the same networks deliberately degrade their products to reduce precision, increasing the amount of money you spend.
But perhaps the second-biggest lie of digital advertising is that it’s essential. Sure, we’re all glued to our phones and tablets, but occasionally, we leave the house. We take public transport. We watch TV and listen to broadcast radio.
Out-of-home, TV and radio advertising might not be the most exciting thing in the world, but at least when you buy a billboard, you know it exists and you know where it is. You can watch TV or listen to the radio to see that your ads run.
That’s actual precision. Just trust me, bro.