It was estimated that the costs related to digital advertising fraud worldwide would increase within the five years between 2023 and 2028, from 88 billion to 172 billion U.S. dollars. That means that the figure will grow roughly 14 percent annually and nearly double in the presented period. However the source projected that the share of losses in digital advertising spending will remain approximately flat. With the growing digitization of processes, including those in advertising, comes a growing risk of fraud. Today when more and more ads are traded programmatically, fraud detection processes are not yet fully developed, and so the bulk of advertising ends up being served to bots instead of potential customers.

Fraud in advertising – costs and concerns

On the one hand, programmatic advertising is very convenient, owing to the automation of buying and selling processes of online ads. However, such systems can increase the likelihood of scams. In 2021, close to 18 percent of ad impressions served programmatically in the United States were fraudulent. Unsurprisingly, nearly one fifth of U.S. marketers consider ad fraud a challange. Until effective tracking tools and stricter regulations on online ad publishing are put in place, ad fraud will remain a significant problem for advertisers and media buyers.

In the fourth quarter of 2021, Indonesia reported the highest bot and ad fraud rate in the Asia-Pacific region, over 15 percent. Singapore followed, as 14.4 percent of all examined ads in the country were identified as fraudulent in Q4 of 2021.

In 2023, the share of advertising fraud in digital advertising spending worldwide was estimated at 22 percent. The source projected that it will increase to 23 percent by 2028.

According to Cognitive Market Research, the global Ad Fraud Detection Tool market size will be USD 281.2 million in 2024. It will expand at a compound annual growth rate (CAGR) of 18.00% from 2024 to 2031.

North America held the major market share for more than 40% of the global revenue with a market size of USD 112.48 million in 2024 and will grow at a compound annual growth rate (CAGR) of 16.2% from 2024 to 2031.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 84.36 million.
Asia Pacific held a market share of around 23% of the global revenue with a market size of USD 64.68 million in 2024 and will grow at a compound annual growth rate (CAGR) of 20.0% from 2024 to 2031.
Latin America had a market share of more than 5% of the global revenue with a market size of USD 14.06 million in 2024 and will grow at a compound annual growth rate (CAGR) of 17.4% from 2024 to 2031.
Middle East and Africa had a market share of around 2% of the global revenue and was estimated at a market size of USD 5.62 million in 2024 and will grow at a compound annual growth rate (CAGR) of 17.7% from 2024 to 2031.
The mobile-focused Ad fraud detection tools category is the fastest growing segment of the Ad Fraud Detection Tool industry

Market Dynamics of Ad Fraud Detection Tool Market

Key Drivers for Ad Fraud Detection Tool Market

Rising Incidence of Digital Ad Fraud to Boost Market Growth

As advertisers invest heavily in digital marketing campaigns across platforms, fraudulent activities such as click fraud, impression fraud, and domain spoofing have become rampant. These fraudulent practices inflate ad metrics, leading to significant financial losses for companies and skewed campaign effectiveness. Businesses are now prioritizing the need for robust ad fraud detection tools to safeguard their advertising budgets, ensuring that their marketing spend reaches genuine audiences. Ad fraud detection solutions leverage advanced technologies such as artificial intelligence, machine learning, and big data analytics to identify and mitigate fraudulent activities in real-time. The growing complexity of fraud schemes and the need for accuracy in digital advertising ROI are further pushing companies to adopt these tools as a critical element of their ad strategy. For instance, TrafficGuard had reported that their tool was included in the Best Tools for PPC Marketers in the 2022 list published by one of the most advanced paid search solutions, adalysis.com. The main focus of this list is functionality and efficiency, which is a huge testament to the work done by the TrafficGuard team to help marketers worldwide optimize the performance of their paid search campaigns

Growth in Programmatic Advertising to Drive Market Growth

The rise of programmatic advertising is another significant driving factor for the Ad Fraud Detection Tool market. Programmatic advertising automates the buying and selling of digital ad space, making it more efficient but also more susceptible to fraudulent activities. With the vast volumes of ad impressions being bought and sold in real time, fraudsters find opportunities to exploit the system. Ad fraud, including bot traffic and fake clicks, has become a growing concern within programmatic channels, where transactions happen too quickly for human oversight. As a result, businesses are increasingly integrating ad fraud detection tools into their programmatic ad operations to ensure transparency and accountability. These tools help detect abnormal patterns and flag suspicious activities, protecting advertisers from wasting resources on fraudulent impressions and clicks.

Restraint Factor for the Ad Fraud Detection Tool Market

The Complexity and Evolving Nature of Ad Fraud Tactics will Limit Market Growth

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In a study conducted in 2019 evaluating the state of ad fraud worldwide, it was found that the global cost of ad fraud that year reached nearly 22.4 billion U.S. dollars. North America accounted for 11.6 percent of that cost, at 2.6 billion U.S. dollars, wile China incurred the largest share of costs, at more than 83 percent.

In a study conducted in 2019 evaluating the state of ad fraud worldwide, it was found that the global cost of ad fraud that year reached nearly 22.4 billion U.S dollars. China accounted for the largest share of that amount, at close to 18.7 billion dollars, while in comparison, the rest of the APAC region incurred costs of 231 million. Japan was reported not to have any instances of ad fraud.

The Bot Manager market is experiencing robust growth, driven by the escalating sophistication of bot attacks and the increasing reliance on digital channels for businesses globally. The market size in 2025 is estimated at $2.5 billion, exhibiting a Compound Annual Growth Rate (CAGR) of 15% from 2025 to 2033. This significant expansion reflects the urgent need for businesses of all sizes – from small enterprises to large corporations – to protect their online assets and customer data from malicious bots. Key drivers include the rise of e-commerce, the increasing frequency and severity of bot-driven fraud (account takeovers, scraping, denial-of-service attacks), and the growing adoption of cloud-based solutions offering scalability and ease of deployment. Trends such as AI-powered bot detection, behavioral biometrics, and the integration of bot management with other security solutions are further accelerating market growth. While the market faces some restraints, including the complexity of implementing bot management solutions and the potential for false positives, the overall market outlook remains exceptionally positive. The cloud-based segment holds a significant market share due to its flexibility and cost-effectiveness, while the large enterprise segment is the primary revenue generator owing to their higher security budgets and greater vulnerability to sophisticated bot attacks. Geographically, North America currently dominates the market, but regions like Asia-Pacific are showing rapid growth driven by increasing internet penetration and e-commerce adoption. The competitive landscape is highly dynamic, with a mix of established players and innovative startups. Leading companies like Alibaba Cloud, Imperva, DataDome, Cloudflare, and Akamai are continuously investing in research and development to stay ahead of evolving bot tactics. The market's future growth will be shaped by the continued advancement of bot detection technologies, the increasing integration of bot management with other cybersecurity solutions, and the ongoing expansion of e-commerce and digital services worldwide. The ability of vendors to offer comprehensive solutions addressing a wide range of bot threats, including account takeover prevention, scraping protection, and denial-of-service mitigation, will be crucial for success in this competitive landscape. Furthermore, partnerships and collaborations within the ecosystem will play a significant role in driving market penetration and growth.

Between January and August 2020, fake users or bots accounted for 54.6 percent of mobile ad fraud activity worldwide. Software development kit (SDK) spoofing – or the creation of legitimate-looking installs with data of real devices without the presence of any actual installs – was the second most common type of mobile ad fraud, with 22.05 percent of fraudulent activity.

In a study conducted in 2019 evaluating the state of ad fraud worldwide, it was found that the average global ad traffic that was deemed invalid accounted for 10.8 percent of total digital ad traffic that year. More than 30 percent of ad traffic in China was invalid, while the second largest region based on bot traffic share was North America, at 3.3. percent.

In 2021, 44 percent of connected TV advertising fraud instances were violations generated by bots; site and app fraud violations accounted for five percent of all instances. The 2022 cost of digital advertising fraud was estimated at 44 billion U.S. dollars.

In a 2019 study assessing the validity of digital advertising traffic in Canada, it was found that the country's ad fraud rate - share of invalid ad impressions - reached two percent that year. Seeing that Canadian advertisers spent 5.6 billion U.S dollars on digital ads in 2019, their losses due to bot traffic amounted to 113 million U.S. dollars that year.

Over the past few years, e-commerce merchants have encountered an upsurge in new fraud types. In 2022, 'fraud as a service' emerged as the most commonly observed fraud trend among online sellers worldwide. This practice involves fraudsters offering services that enable fraudulent activities for their clients. Reseller and bot activities and social engineering through customer service were the second and third most prevalent fraud trends. These fraud trends affected 53 percent and 45 percent of the businesses surveyed.

Digital advertising spending in Asia has grown rapidly in recent years, amounting to an estimated 257 billion U.S. dollars in 2024. A significant increase from around 125 billion dollars in 2019, digital ad spend in Asia was projected to continue its upward trajectory, set to reach an estimated 332 billion dollars by 2028. Digital advertising on the rise Many countries and territories in the Asia-Pacific region, particularly in East and Southeast Asia, already have high internet penetration rates of 70 percent and over. During the COVID-19 pandemic, consumers have increasingly turned to online channels for new product discovery and for purchasing said products. Advertisers in APAC have been capitalizing on this ongoing development for more than a decade, as ad spending for internet surpassed television ad spend in 2015, thus becoming the marketing medium with the highest advertising expenditure in the region. Wasted ad spend One of the leading risks for advertisers and advertising networks is ad fraud, leading to billions of dollars of wasted ad spend per year. Ad fraud generally refers to fraudulent activity in which scammers inflate ad engagement by using low-paid workers or bots, drawing financial gain from networks paying them based on ad impressions or clicks.Tech giants Facebook and Google are among the platforms the highest ad spend is wasted on in APAC. The prevalence of advertising and bot fraud differs vastly across the region, being below one percent in some countries and territories and over ten percent in the countries most affected.

In 2022, mobile app install frauds across all examined categories on Android devices made us for the most bot operations. Bots were used in around 75 percent of the fraudulent installs of finance apps, as well as in over 75 percent of all fake installs of social apps. Midcore gaming apps were more likely than other app categories to be targeted by click flooding as fraudulent installs, while hypercasual gaming apps saw approximately 24 percent of their fraudulent installs coming from fake publisher activities.

China is one of the key drivers of global mobile ad spending. In 2023, the market size of the Chinese mobile advertising industry increased by 2.7 percent to approximately 465 billion yuan. With an enormous user base turning to “mobile-first” and a vibrant digital advertising landscape, China’s mobile ad market size was expected to exceed 480 yuan by 2025. Advertising in China: the digital age As of 2021, digital advertising accounted for about 80 percent of China’s total media ad expenditure. The Chinese tech titans - Alibaba, Tencent, Baidu, and ByteDance – are the major driving forces in this rapidly growing market. The e-commerce giant Alibaba would continuously dominate the sector in 2020, whereas the coronavirus (COVID-19) pandemic has created a significant impact on digital ad platforms. The dark side of the fairy tale Mobile advertising made up for the majority of digital ad spending in China. Having established itself as an indispensable instant messaging app in China, Tencent’s WeChat has become one of the largest mobile ad platforms. Taking the current circumstances of coronavirus into consideration, the total amount spent on mobile ads would exceed 150 billion U.S. dollars by the year 2024. Despite the huge market opportunity, advertisers need to be aware of online ad fraud in China, given that the prevalence of bots generating invalid ad traffic is higher than the global average.