AI-driven ad fraud causes 12% marketing spend leakage: mFilterIt report
The report warns that marketers’ reliance on outdated metrics, such as viewability, clicks, CTR and installs, is distorting optimisation efforts
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Ad fraud is accelerating faster than India’s digital economy can regulate it, driven by AI systems that increasingly mimic real user behaviour and evade rule-based verification, according to mFilterIt’s 2025 validation analysis.
The report warns that marketers’ reliance on outdated metrics, such as viewability, clicks, CTR and installs, is distorting optimisation efforts and causing an estimated 12% leakage of marketing budgets to invalid or fraudulent traffic. What is often labelled as routine inefficiency, the report argues, has become a direct profit-and-loss risk for brands.
A deeper audit revealed that 30-45% of programmatic traffic marked “valid” failed secondary validation checks, signalling systemic vulnerabilities. Display and video platforms recorded 15-18% frequency-cap breaches, while 43% of invalid traffic originated from affiliate networks, driven by incentivised actions, click spamming and organic hijacking.
The analysis challenges long-held assumptions about media quality and brand safety. Viewable impressions, once the gold standard, were frequently served to bots, not humans. Fraud was found to persist even inside premium, closed ecosystems, while upstream exposure continued to distort performance metrics.
Brand safety tools were equally compromised: contextual and vernacular cues often went undetected, and contaminated retargeting pools redirected optimisation in the wrong direction.
According to the report, marketers, agencies and platforms must rethink digital advertising as a single, interconnected risk surface, rather than separate branding and performance layers. Platform-reported metrics, it cautions, are no longer sufficient.
To counter the evolving threat, mFilterIt recommends full-funnel validation instead of point-in-time checks and the use of multi-signal intelligence over single-metric scoring. It also calls for stronger independent oversight to fill gaps in platform-reported data and encourages context-led decision-making rather than keyword filtering to enhance media quality.
“The real risk in digital advertising is not fraud itself, but the illusion of clean data,” said Amit Relan, CEO and Co-founder of mFilterIt. “Marketers must treat trust as a performance metric. Robust validation, multi-signal intelligence and context-led decision-making are essential for operating confidently in an AI-accelerated ecosystem.”
Dhiraj Gupta, CTO and Co-founder of mFilterIt, added: “Fraud today mirrors human behaviour at scale, making traditional rule-based systems obsolete. The future lies in behavioural, contextual, full-funnel intelligence.”
