How IVT and Ad Fraud Continue to Erode Spend and Trust in Digital Advertising: The Latest Developments

The digital advertising ecosystem stands at a pivotal crossroads. As AI-powered ad fraud and Invalid Traffic (IVT) grow increasingly sophisticated and pervasive, they threaten to cost the industry billions and undermine the trust essential for a transparent, sustainable future. Recent developments reveal an escalating arms race—where fraudsters harness AI to craft undetectable attacks, while industry players deploy advanced AI defenses to protect their ecosystems. This dynamic landscape impacts high-value channels such as Connected TV (CTV), programmatic advertising, and social platforms, with regional nuances from North America to India and Australia.

---

The Escalating Scale and Complexity of Ad Fraud

Explosive Financial Impact and Vulnerable Channels

Projections estimate that ad fraud will cost over $63 billion (€53.6 billion) globally in 2024—a figure that continues to climb as fraud tactics become more autonomous and covert. In the U.S., click fraud losses are expected to exceed $40 billion by 2026. The sectors most affected include:

• Programmatic Advertising: Its real-time automation creates fertile ground for AI-driven bots and data manipulation.
• Connected TV (CTV): Offering premium content with less regulatory oversight, CTV suffers from identity impersonation, matching failures, and AI-generated fake inventory.
• Social Media & Affiliate Networks: These platforms are plagued with click hijacking, fraudulent engagement, and theft of commissions, eroding advertiser confidence.
• Sensitive Verticals: Sectors like healthcare and finance are especially vulnerable due to distorted metrics that mislead campaign performance and misallocate budgets.

Evolving and Covert Attack Strategies

Traditional detection methods—focused on traffic anomalies—are increasingly ineffective against AI-powered, autonomous threats:

• Autonomous AI Bots: Agentic AI systems now mimic human behavior convincingly, infiltrating high-value inventory such as CTV and social media.
• Impersonation & Identity Theft: Malicious actors impersonate real users or publishers, complicating efforts to distinguish legitimate activity from fraud.
• Web Scraping & Data Exploitation: Web scraping activities feed publisher content into AI training datasets—often without licensing or attribution—which fuels malicious AI models used for fraud, impersonation, and disinformation.
• Rapid, Dynamic Attacks: Malware and real-time attack campaigns enable fraud networks to evade detection and adapt swiftly, challenging existing defenses.

---

The Dual Role of AI: Enabler and Defender

A noteworthy recent development is the dual role of AI—serving both fraudsters and industry defenders—which has intensified the arms race:

AI as an Enabler for Fraud

• Autonomous, Adaptive Bots: Fraud networks deploy agentic AI capable of crafting convincing, evolving bots that evade detection and manipulate engagement metrics in real-time.
• Blurring Boundaries: These agentic activities make it extremely challenging for traditional detection systems to distinguish genuine users from sophisticated bots, amplifying undetected fraud.

AI as an Industry Defense

• Real-Time, Autonomous Detection: Leading firms utilize advanced AI solutions that monitor traffic continuously, identify, and block malicious activity before it impacts campaigns.
• Supply-Chain Resilience: Companies are embedding AI-driven defenses into supply chains, especially within CTV environments, transforming vulnerable channels into more trustworthy, fraud-resistant ecosystems.

"Agentic AI is transforming programmatic CTV—from a vulnerable channel to one where autonomous detection and mitigation are embedded into the supply chain," industry experts affirm.

The Ongoing Arms Race

This duality underscores a perpetual battle:

• Fraudsters deploy AI to develop more convincing, adaptive attacks that evade detection.
• Industry stakeholders deploy AI to detect, mitigate, and foster transparency, striving to stay ahead of increasingly sophisticated threats.

---

Recent Industry Innovations and Strategic Responses

Behavior-Based In-App Bot Protection

A major breakthrough comes from Impart Security, which has introduced Programmable Bot Protection emphasizing behavioral analysis during runtime:

• Behavioral Signatures: Detects malicious activity patterns characteristic of agentic AI bots.
• In-Application Enforcement: Deploys detection mechanisms directly within applications, enabling early identification and blocking of advanced bots before they generate fraudulent impressions or engagements.

"Detection and enforcement inside the application runtime, where AI-powered bots reveal themselves through behavior," states Impart Security’s CEO. This approach raises detection thresholds beyond conventional methods.

Focus on Ads in AI Ecosystems

As AI platforms like ChatGPT and OpenAI’s conversational agents increasingly host ads, trust and verification standards are becoming crucial:

• Content Moderation & Verification: Developing protocols for ad placement verification within AI environments to prevent malicious or deceptive ads.
• Risks of Exploitation: Malicious actors could use AI platforms to distribute disinformation or malicious ads, further undermining brand safety.
• Industry Calls for Governance: Leaders and regulators are advocating for standardized frameworks to ensure ad authenticity in AI-driven environments.

Persisting Challenges in CTV

Recent research highlights identity match failures in CTV environments, which undermine targeting and measurement, eroding trust and campaign effectiveness. These gaps hinder measurement accuracy and transparency.

Web Scraping & AI Training Data Risks

As detailed in "In Graphic Detail", web scraping remains a major concern. Publisher content is frequently fed into AI training datasets without licensing or attribution, enabling malicious AI models that foster fraud, impersonation, and disinformation—further exposing vulnerabilities.

---

Industry Responses: Strengthening Defenses and Standards

To combat these threats, the industry is adopting multi-layered strategies:

• Advanced Detection Technologies: Companies like Lunio utilize machine learning and live analytics to proactively identify and block malicious traffic.
• Verified Inventory Initiatives: Projects such as Cadent’s CTV Verified Inventory aim to enhance supply chain transparency, addressing identity matching issues and measurement distortions.
• Threat Intelligence Sharing & Industry Standards: Collaborations like NIQ and Amazon Marketing Cloud (AMC) exchange threat intelligence and best practices.
• Regulatory & Industry Frameworks: The IAB Tech Lab’s LEAP (Live Event Ad Playbook) and MRC standards are working toward greater transparency and trust in high-risk inventory.

---

Recent Market Signals and Trust Gaps

Exit from The Trade Desk’s OpenPath

Recent reports indicate that Dentsu and WPP have quietly exited The Trade Desk’s OpenPath platform amid concerns over transparency and hidden fees. This move underscores industry skepticism about platform transparency, cost structures, and trustworthiness within programmatic channels.

Cautious Adoption of Interactive CTV in Australia

In Australia, interactive CTV advertising remains in a "cautious" phase, hindered by measurement gaps and creative challenges. Both marketers and publishers are wary due to trust issues and practical hurdles, reflecting ongoing vulnerabilities even as the channel shows promise.

Regional Measurement Initiatives: India’s Evolving Approach

India’s AdTech ecosystem is actively restructuring measurement standards and collaborating to combat IVT and boost transparency. These efforts aim to tailor solutions to local ecosystem needs, addressing region-specific challenges with regional cooperation.

---

Industry Innovation: DoubleVerify’s Verification of LinkedIn CTV Ads

A noteworthy recent development is DoubleVerify’s launch of DV Authentic Ad® for LinkedIn CTV ads, which introduces rigorous verification standards that:

• Confirm ad placement authenticity.
• Measure viewability and brand safety specifically in CTV inventory.
• Integrate seamlessly within social and AI ecosystems, making trustworthy delivery more feasible in high-risk environments.

This initiative strengthens verification protocols and addresses rising concerns about ad fraud in high-value channels.

DoubleVerify’s Strong FY2025 Results

Recent financial disclosures from DoubleVerify underscore the growing market demand for verification solutions:

• Revenue increased by 14% in 2025, reaching $748.3 million, driven by global growth in social and CTV measurement.
• Q4 2025 results highlighted strong margins despite some growth deceleration, signaling robust client demand.

Furthermore, their investor slides project that AI search ad spend will reach over $25 billion by 2029, emphasizing the increasing importance of verification standards in AI-driven environments.

---

The Industry’s Collective Response: The Ventura Ecosystem

Adding to the momentum, The Trade Desk recently launched the 'Ventura Ecosystem', a collaborative platform designed to enhance transparency and measurement in CTV:

• Standardizes data sharing across demand-side and supply-side entities.
• Reduces friction in ad placement verification.
• Builds trust among advertisers, publishers, and platforms.

A Trade Desk spokesperson emphasized that "The Ventura Ecosystem aims to create a more transparent and accountable CTV environment," helping counteract IVT and fraudulent inventory while fostering more reliable measurement.

---

Moving Forward: Building a Resilient, Trustworthy Ecosystem

The AI-enabled arms race underscores that fraudsters will continue deploying increasingly convincing and adaptive attacks. To counteract this, industry defenses must evolve at the same pace:

• Deploy autonomous, adaptive defenses capable of real-time detection and response.
• Establish comprehensive governance frameworks for AI-powered ad environments, especially within high-risk channels like CTV.
• Ensure supply-chain integrity through verified inventory protocols.
• Foster cross-industry threat intelligence sharing to anticipate and neutralize emerging attack vectors.

---

Current Status and Industry Implications

The landscape remains fluid and tense. Fraudsters leveraging AI are developing more convincing, adaptive attacks, but industry initiatives—such as DoubleVerify’s verification solutions, The Ventura Ecosystem, and industry standards—offer hope for restoring trust and transparency. Yet, trust remains fragile, exemplified by Dentsu and WPP’s exit from OpenPath and regional measurement challenges in Australia and India.

The industry’s ability to innovate, collaborate, and adopt autonomous, AI-driven defenses will be crucial in preserving the integrity of the digital advertising ecosystem in an AI-enabled threat landscape.

---

Final Reflection

As malicious actors deploy increasingly convincing AI-powered fraud tactics, the industry's response must be just as sophisticated—centered on autonomous detection, verified supply chains, and robust standards. The future of digital advertising hinges on collective vigilance, technological innovation, and shared governance. Only through proactive, collaborative efforts can the ecosystem navigate these AI-driven threats and restore confidence for brands, publishers, and consumers alike.

---

Additional Insight: Emphasis on Quality Over Cost

A recent ANA report underscores that media quality now surpasses cost efficiency as a top priority in programmatic advertising. This shift reflects the growing urgency to secure verified, transparent inventory—a direct response to IVT and ad fraud. Brand safety, measurement integrity, and trustworthiness are now central to strategic decisions, reinforcing the importance of industry-wide verification standards and collaborative efforts.

---

In summary, the digital advertising landscape faces unprecedented challenges from AI-powered IVT and ad fraud. While fraudsters leverage AI to craft more convincing attacks, industry players are deploying innovative, autonomous defenses, establishing standards, and fostering collaborative initiatives to restore trust. The path forward demands vigilance, technological agility, and collective action—only then can the ecosystem fortify itself against the AI-enabled threats and secure a trustworthy future for all stakeholders.