A documentary vividly reveals the secrets of one of the world’s largest sources of organized crime revenue.

Τhe average person is exposed to hundreds of digital ads daily. Most of these are online ads — appearing alongside articles, in social media timelines, or in the middle of videos on streaming platforms. “Advertising is the primary business model of the internet,” says Guy Krief, a Greek-French tech entrepreneur and creator of the award-winning documentary Unclickable, which was recently screened in cinemas and is available on Ertflix.

The documentary focuses on digital ad fraud, an industry estimated to reach $100 billion this year. In 2023 alone, $84 billion intended for online advertising was lost to fraud, according to Juniper Research. This amount accounts for approximately 10% of total global digital advertising expenditure in 2023, though other studies suggest the percentage may be even higher.

“Before 2017, I knew nothing about digital ad fraud. At the time, I was CEO of the Greek marketing technology company Upstream. We were running a campaign for a Brazilian telecom company that didn’t make sense — our data suggested that 1 in 10 Brazilians was clicking on our ads. That was impossible. When we investigated, we stumbled upon the second-largest source of criminal revenue after drug trafficking: digital ad fraud,” explains Krief.

The Mechanics of Digital Ad Fraud

Digital ad fraud began around 15 years ago, coinciding with the rise of ad exchanges. Augustine Fou, a U.S.-based digital ad analyst and founder of Fou Analytics, explains: “Ad exchanges aggregate numerous small websites on-to their platforms, where auctions are held for each ad impression, and advertisers bid for placements. This created the perfect environment for fraud to thrive. Fraudsters create thousands of websites, insert them into ad exchanges, and use bots and software to generate fake page views and ad impressions.”

The fraud primarily affects pay-per-click (PPC) and pay-per-impression models, where advertisers pay based on the number of clicks or views. However, many of these clicks and views are generated by bots — programs designed to repeatedly load web pages and click on ads — creating a false image of ad effectiveness. As a result, companies end up paying for ads that no human ever sees.

“For every auction held, the ad exchange takes a percentage of the transaction. About 50% goes to the platform, while the remaining 50% goes to the website owner. The ad exchange industry is dominated by fraudsters. Very few people know which websites are actually receiving ads from these exchanges, yet they rack up millions of views from bots, selling millions of impressions to advertisers,” says Fou.

The Winners

Who benefits from this massive ad fraud economy? Among the biggest winners are two internet giants: Google and Meta (Facebook, Instagram, WhatsApp). In 2023, their combined advertising revenue reached approximately $370 billion, their primary source of income. “In 1999, Google was on the verge of shutting down. Then it introduced advertising, revenues skyrocketed, and Google became what it is today,” says Andreas Ramos, a professor of digital marketing at the California University of Technology and Science (CTSU).

Both Google and Meta operate their own ad exchanges, with Google controlling the largest one, DoubleClick, which it acquired in 2008 for $3.1 billion. “Google profits from ad space in its search engine as well as through the DoubleClick exchange. It has a monopoly on every aspect of the advertising industry,” Ramos points out.

In November 2023, the antitrust trial against Google over its digital advertising monopoly concluded. A ruling is expected in February, with the most likely outcome being a mandate for increased transparency, giving advertisers greater control over their ad performance.

“Google has developed an AI-driven program called Performance Max, which is used in most Google Ads campaigns — used by about 80% of advertisers. Performance Max automatically places ads where they are expected to perform best. However, this often means placing them on websites where most traffic comes from bots,” says Ariel Garcia, COO of CheckMyAds, an independent ad verification organization.

Besides Google and Meta, other beneficiaries of ad fraud include ad agencies, ad exchanges, and website owners hosting fraudulent ads. “When an ad is served to a bot, everyone in the process — from the ad exchange to the website owner — gets a cut of the advertiser’s money,” adds Garcia.

And Losers

“Advertisers are the most obvious victims of digital ad fraud, but the reality is more complex. Tens of millions of people, whose devices are infected with malware used to execute ad fraud (e.g., fake clicks), are also silent and invisible victims. Journalism, which relies on advertising for funding, is another casualty,” explains Krief.

“Some websites exist solely to generate ad revenue. With AI-generated content, it has become even easier to create automated websites, posing unfair competition to legitimate publishers. In some cases, terrorist organizations have set up fake lifestyle websites to generate ad revenue for funding their operations. These websites appear safe for advertisers, so ads run on them. Meanwhile, reputable news sites that report on these terrorist groups may be flagged as ‘brand unsafe,’ preventing them from receiving ads. When credible information sources suffer, society as a whole suffers,” adds Garcia.

The Shock Factor

When Krief screened Unclickable for executives of companies that invest heavily in digital advertising, many were shocked by the scale of the fraud. “After the screening, we heard of companies pausing or reassessing their digital ad budgets,” he notes. “In 2017, Procter & Gamble cut its digital ad spend by about $200 million, yet saw no impact on its revenue — though this doesn’t mean digital advertising is completely ineffective,” Fou points out.

Digital Ad Fraud in Greece

“Ad fraud exists worldwide and varies significantly by market. In Greece, fraud levels are much lower than in other markets but have been documented for over a decade,” says Georgia Zacharaki, Director of Strategic Client Engagement and Innovation at Tempo OMD in Greece.

“In Greece, digital ad fraud is estimated to be less than 1% of total ad spending, according to ad verification companies. Using ad verification tools essentially eliminates fraud, ensuring payment only for genuine impressions. Major companies in Greece already use these tools,” she adds.

However, some experts argue that ad verification companies themselves may contribute to the problem by turning a blind eye to fraud. “Ad verification companies claim to prevent ad fraud and ensure brand safety, but their technology is inconsistent, and conflicts of interest exist. The U.S. watchdog, the Media Rating Council (MRC), is highly opaque regarding its auditing processes. Google and Meta are members of the MRC, so they have no incentive to disclose the true extent of ad fraud,” Garcia explains.

In Europe, digital ad fraud was estimated at around $20 billion in 2023, and by 2028, it is expected to double to $42 billion, according to Juniper Research. “In Greece, the two dominant advertising mediums are television and digital. However, digital advertising is growing at a faster rate and is likely to surpass TV in the coming years. Digital marketing continues to gain ground because it provides real-time analytics, making advertisers feel more secure about their campaigns. Additionally, digital ad targeting is much more precise,” concludes Zacharaki.