The $1B Problem No One Wants to Talk About
Or who's really watching ads on CTV...?
Connected TV (CTV) advertising has a fraud problem, and it’s not a small one. If you’ve spent any time in ad tech, you’ve probably heard the stats—nearly 1 in 5 CTV ad impressions in the U.S. is fake. That’s bots, spoofed inventory, and shady back-end manipulation siphoning ad dollars away from real audiences.
In 2024 alone, CTV ad fraud is expected to cost the industry over $1 billion—and that’s just the fraud we know about. The real number? Probably much higher.
CTV is attractive to fraudsters for one simple reason: high CPMs. Unlike display ads, where fraudsters have to work hard for small margins, CTV ad rates can reach $20+ per thousand impressions. That means if you’re a scammer faking ad traffic, CTV is where the big money is.
Invalid Traffic (IVT) is skyrocketing – In 2024, invalid traffic on programmatic CTV ads in the U.S. was 22%. That’s higher than most other digital ad categories, making it a prime target for fraudsters.
Fraudsters use bot networks and device emulators to generate 650+ million fake ad requests per day. And that’s just from one known scheme. And now CTV fraud is outpacing detection – New fraud techniques (AI-driven bots, SSAI spoofing, MFA apps) are constantly evolving, making detection an endless game of cat and mouse.
How Does CTV Fraud Work?
CTV fraud isn’t just one thing—it’s a collection of tactics designed to trick advertisers into paying for ads that no real person ever sees.
First up, fraudsters create botnets that pretend to be real CTV devices. You can read extensively about how the Pareto botnet infected 1 million Android devices and spoofed 6,000+ CTV apps, generating 650M fake ad requests per day. These bots can fake being a Roku, Fire TV, or smart TV, generate millions of ad impressions per day, and trick advertisers into thinking they’re reaching real households
We also get fake CTV Apps. (It seems MFA isn’t just a problem for digital). Pixalate found 2% of all CTV apps in Q2 2024 were MFA apps, CTV apps exist solely to serve ads—no real content, no real users. These Made-For-Advertising (MFA) apps are eating up $58M in ad spend, all the while runing ads in the background (even when the app isn’t being used), spoofing more popular apps to trick advertisers and generating millions in waster spend.
The final fraud move is premium inventory spoofing: buy cheap traffic and spoof it to look like CTV. Fraudsters make mobile web traffic appear as premium CTV impressions, so advertisers pay 20x higher CPMs for garbage inventory. The DiCaprio scheme used fake apps and domains to impersonate Grindr’s CTV inventory and sell non-existent ad slots.
And don’t believe that server-side ad insertion is sage. Fraudsters exploit it to generate fake ad impressions by running ads on fake SSAI servers (ads “play” but no one sees them), they then spoof device IDs to make it look like real TVs are watching. The StreamScam scheme used fake SSAI servers to create millions of phony CTV ad requests daily, costing advertisers hundreds of millions.
Why Isn’t it Stopping?
Advertisers aren’t paying attention – Many assume CTV is as fraud-proof as traditional TV. It’s not.
Platforms lack transparency – Many ad exchanges don’t provide full transparency into where ads are running.
Verification isn’t universal – Some advertisers still don’t use fraud detection tools, leaving them exposed.
And of course, fraudsters innovate faster – Every time a scam is caught, a new one pops up. CTV ad fraud doesn’t have to steal your budget. The industry is making progress—ad verification tech is improving, platforms are cracking down on shady players, and more brands are waking up to the risks.
But if you’re running CTV ads, it’s on you to be vigilant. Without the right protections, there’s a good chance you’re paying for ads that no real person is watching.
Time to stop funding fraudsters and start demanding better.
