Fake Traffic Costs Billions: Ad Fraud Persists Despite CTV's ‘Safe’ Image

By Angela Gray | November 07, 2025

Digital advertising continues to be a battleground – not against competitors, but against increasingly sophisticated fraud. A new report from Pixalate reveals that invalid traffic (IVT), encompassing everything from bot activity to more complex ad fraud schemes, continues to siphon billions from marketing budgets. While the industry has made strides in combating these threats, the latest data suggests the problem is far from solved – and even the seemingly ‘safe haven’ of Connected TV (CTV) isn’t immune.

Pixalate’s Q3 2025 North America IVT & Ad Fraud Benchmark Reports paint a stark picture. The U.S. sees an overall IVT rate of 21% for web traffic, 24% for mobile app traffic, and 18% for CTV. While Canada’s numbers are slightly better, the prevalence of invalid traffic across all channels is deeply concerning. Globally, mobile apps are particularly vulnerable, with IVT rates reaching 33%.

“The sheer scale of the problem is staggering,” explains one ad fraud analyst, speaking anonymously. “Advertisers are essentially paying for impressions and clicks that never come from real people. This not only impacts ROI but also distorts marketing metrics, making it difficult to accurately assess campaign performance.”

Beyond the Numbers: A Deep Dive into the Cost of Fraud
The financial implications are substantial. Industry estimates suggest that ad fraud costs advertisers over $68 billion annually worldwide – a figure that continues to grow as fraudsters become more adept at evading detection. This isn't merely a cost of doing business; it’s a direct drain on resources that could be used for innovation, expansion, or genuine marketing efforts.

“It's not just the direct monetary loss,” says a marketing executive at a large retail chain, also speaking anonymously. “It's the opportunity cost. Those fraudulently spent dollars could have reached actual customers, driving sales and building brand loyalty.”

While web and mobile app fraud have been prevalent for years, the growth of CTV has created new vulnerabilities. The proliferation of streaming devices and apps, coupled with the relative lack of robust fraud prevention measures in the early days of CTV advertising, has made it an attractive target for fraudsters.

“CTV was initially seen as a ‘clean’ channel,” explains an industry insider. “But that perception was misplaced. Fraudsters quickly realized they could exploit the unique characteristics of CTV, such as device spoofing and app manipulation, to generate fake impressions and clicks.”

The Evolving Tactics of Fraudsters
The methods used by fraudsters are constantly evolving. Simple bot traffic is still a problem, but more sophisticated techniques are becoming increasingly common. These include:

• Domain Spoofing: Fraudsters create fake websites that mimic legitimate publishers, attracting ad impressions and clicks.
• App Spoofing: Fake mobile apps are created to generate fraudulent impressions and clicks.
• Device Spoofing: Fraudsters use software to disguise their devices as legitimate smartphones or streaming devices.
• Click Farms: Networks of real people are paid to click on ads, generating fraudulent traffic.
• Ad Injection: Malicious code is injected into legitimate apps to display unwanted ads and generate revenue for fraudsters.

Fighting Back: A Multi-Faceted Approach
Combating ad fraud requires a multi-faceted approach, involving advertisers, publishers, ad tech vendors, and industry organizations. Several key strategies are being employed:

• Sophisticated Fraud Detection Technologies: Ad tech vendors are developing more advanced algorithms and machine learning models to detect and block fraudulent traffic.
• Data Transparency and Verification: Industry initiatives are focused on improving data transparency and verifying the authenticity of ad impressions and clicks.
• Industry Collaboration: Organizations like the Media Rating Council (MRC) are working to establish industry standards and best practices for ad fraud prevention.
• Blockchain Technology: Some companies are exploring the use of blockchain technology to create a more transparent and secure ad supply chain.
• Viewability and Verification Tools: Implementing tools like those offered by IAS and DoubleVerify help ensure ads are genuinely seen by real users.

Pixalate’s own accreditation from the MRC for SIVT detection is a testament to the increasing sophistication of these tools. However, as one source notes, “It’s a constant arms race. As soon as we develop a new solution, fraudsters find a way to circumvent it.”

The Ethical Imperative
Beyond the financial implications, ad fraud raises serious ethical concerns. It undermines trust in the digital advertising ecosystem, harms legitimate publishers, and ultimately erodes consumer confidence. “Fraudulent activity impacts the entire ecosystem,” explains a publisher representative. “It diverts revenue away from legitimate content creators and dilutes the value of advertising.”

The future of digital advertising depends on building a more transparent, accountable, and ethical ecosystem. Advertisers, publishers, and ad tech vendors must work together to prioritize fraud prevention and ensure that marketing dollars are spent effectively and responsibly. While the challenge is significant, the stakes are too high to ignore. The continued proliferation of ad fraud isn't just a business problem – it's a threat to the integrity of the entire digital economy.