DoubleVerify: Gen AI Driving Significant Increase in New Ad Fraud Schemes and Variants

Rhea-AI Summary

DoubleVerify (DV) has published findings from its eighth annual Global Insights Report, revealing a notable increase in new ad fraud schemes in digital media. The DV Fraud Lab identified a 23% rise in new fraud schemes and variants in 2023, with a significant 60% increase in audio and video streaming fraud. Unprotected advertisers faced a fraud violation rate as high as 17%, driven by bot fraud, site fraud, and hijacked devices. Generative AI has facilitated these schemes, enabling fraudsters to generate authentic-looking user agents and mimic human behavior. Despite this, DV is leveraging AI to combat fraud, analyzing over one trillion impressions across multiple markets and platforms. AI's role in generating fraudulent activities and combating them is a central theme of this report.

Positive

• 23% increase in new fraud schemes indicates proactive detection capabilities.
• 60% rise in streaming fraud highlights DV's vigilance in identifying evolving threats.
• DV leverages AI to process vast data, enhancing fraud detection accuracy.
• Comprehensive analysis covering one trillion impressions from 2,000 brands in 100 markets.
• Detailed regional market analysis supports global advertisers.

Negative

• Fraud/SIVT violation rate reaches 17% for unprotected advertisers.
• Generative AI simplifies creating sophisticated fraud schemes.
• 269% increase in variants of bot fraud schemes targeting streaming platforms.
• AI-generated fake reviews and shell companies complicate fraud detection.
• Doubling of mobile app fraud investigations indicates escalating threats.

Insights

Financial Analyst

The rise in ad fraud schemes and variants, particularly in new platforms like Connected TV (CTV) and streaming audio, has significant implications for companies such as DoubleVerify and others in the ad verification and cybersecurity space. The 23% increase in fraud schemes year-over-year indicates an escalation in the threat landscape, driven by generative AI. This trend could prompt advertisers to invest more heavily in fraud detection services and technologies, directly benefiting companies like DoubleVerify.

For investors, this is a double-edged sword. On the one hand, the increased demand for sophisticated fraud detection solutions could lead to revenue growth for companies in this space. On the other hand, the persistent and evolving nature of these fraud schemes poses a systemic risk to the broader digital advertising ecosystem. Investors should closely monitor how effectively DoubleVerify can leverage AI to stay ahead of fraudsters, as their ability to do so will be critical in maintaining advertiser trust and market share.

Rating: 1

Tech Expert

The use of generative AI to create sophisticated ad fraud schemes is a concerning development. Generative AI allows fraudsters to mimic human behavior more convincingly, making detection increasingly difficult. This not only underscores the sophistication of modern fraud techniques but also highlights the need for advanced AI-based defense mechanisms.

DoubleVerify's approach, utilizing AI to combat fraud, is aligned with industry needs. However, the efficacy of these solutions will depend on continuous innovation and the ability to process vast datasets to detect subtle anomalies. Investors should be aware that while AI offers powerful tools for both attack and defense, the arms race between fraudsters and defenders is likely to intensify, requiring substantial ongoing investment in R&D.

Rating: 1

Market Research Analyst

The findings from DoubleVerify's report have broader market implications, particularly for advertisers and digital platforms. The 17% fraud/SIVT violation rate for unprotected advertisers highlights a significant vulnerability that could erode trust in digital advertising. This could lead to shifts in advertising budgets, with more funds allocated to verified, lower-risk channels or platforms offering robust fraud protection.

For retail investors, understanding this shift is important. Companies that can demonstrate superior fraud detection and prevention capabilities are likely to see increased demand for their services. However, market saturation and the rapid evolution of fraud tactics mean that only those continuously enhancing their technology and adapting to new threats will sustain long-term growth.

Rating: 1

DV Fraud Lab found an over 20% surge in new fraud schemes including an almost 60% increase in audio and video streaming fraud schemes and variants

NEW YORK--(BUSINESS WIRE)-- DoubleVerify ("DV"), the leading software platform for digital media measurement, data, and analytics, today announced a preview of findings from its eighth annual Global Insights Report, which analyzes media quality and performance trends across more than one trillion impressions from over 2,000 brands in 100 markets. The findings underscore a significant year-over-year increase in new fraud schemes, with fraudsters shifting their focus to platforms and channels like Connected TV (CTV) and streaming audio.

In 2023, DV’s research revealed a 23% surge in new fraud schemes and variants compared to the previous year, according to the DV Fraud Lab. Additionally, unprotected advertisers saw a fraud/SIVT (Sophisticated Invalid Traffic) violation rate as high as 17%. These violations include incidents of bot fraud, site fraud, app fraud, hijacked devices, nonhuman data center traffic and injected ad events, all of which illegitimately inflate online advertising impressions or data events to generate revenue.

A key factor for the increase – Generative AI. DV has found that Gen AI makes it easier to falsify data patterns.

“Bot fraud, for example, commonly targets streaming environments such as CTV and audio, where fraudsters rely on falsified impression data to make it look like ads are delivering to real users,” said Roy Rosenfeld, Head of the DV Fraud Lab. “With AI, attackers can generate thousands of seemingly authentic user agents, which retrieve and facilitate end-user interaction with web content. Attackers may then further use AI to mimic human behavior, making the pattern of bot traffic more difficult to detect.”

Bad actors are not just using AI to grow their schemes; DV also found that falsified impression schemes are evolving more quickly. The average bot fraud scheme targeting streaming platforms spawned 269% more variants in 2023, for a total of 58% more streaming fraud schemes and variants in the year.

AI also makes it easier for bad actors to set up new websites for shell companies and publish new apps with dozens of fake reviews that create the illusion of an audience. Investigations into mobile app schemes revealed a heavy reliance on these types of deceptive tactics. AI makes this type of falsification increasingly simple to generate. As a result, DV’s mobile app fraud investigations doubled in 2023.

“Fortunately,” added Rosenfeld, “good AI can be used to fight bad AI. DV, for example, leverages AI to process vast amounts of data daily and assess impression quality. Machine learning efficiently processes data in real time. AI then identifies trends and patterns that would be invisible to a human analyst who is not using advanced AI techniques. As the fraudsters grow more sophisticated through AI, it’s imperative that we also use AI to protect against their schemes.”

Method: The report employs DV technology to analyze over one trillion impressions from over 2,000 brands in 100 markets, both pre and post-bid, and offers a detailed market-by-market analysis for North America, LATAM, EMEA, and APAC. It covers video and display impressions from January to December 2023 across desktop, mobile web, mobile app, and connected TV (CTV). The study also includes a global survey conducted by Sapio, polling 1,000 advertisers across North America, LATAM, EMEA, and APAC.

For more information about DV’s Global Insights Report, visit: https://doubleverify.com/global-insights-2024-trends-report

About DoubleVerify

DoubleVerify (“DV”) (NYSE: DV) is the industry’s leading media effectiveness platform that leverages AI to drive superior outcomes for global brands. By creating more effective, transparent ad transactions, DV strengthens the digital advertising ecosystem, ensuring a fair value exchange between buyers and sellers of digital media.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240617019693/en/

Media Contact:

Chris Harihar

chris@crenshawcomm.com

Source: DoubleVerify

FAQ

What did DoubleVerify's eighth annual Global Insights Report reveal about ad fraud?

The report revealed a 23% year-over-year increase in new ad fraud schemes, with a 60% rise in audio and video streaming fraud.

How has Generative AI impacted ad fraud according to DoubleVerify?

Generative AI has made it easier for fraudsters to create authentic-looking user agents and mimic human behavior, increasing the sophistication of ad fraud schemes.

What is the fraud/SIVT violation rate for unprotected advertisers mentioned in DoubleVerify's report?

Unprotected advertisers experienced a fraud/SIVT violation rate as high as 17%.

How has DV used AI to combat fraud as per the Global Insights Report?

DV leverages AI to process vast amounts of data in real-time, identifying trends and patterns in ad impressions that would be invisible to human analysts.

What regions and platforms did DoubleVerify's analysis cover in the report?

The analysis covered North America, LATAM, EMEA, APAC, and included desktop, mobile web, mobile app, and connected TV (CTV) platforms.