Meta's Ad Fraud Epidemic Exposed: Former Integrity Chief Speaks Out

Rob Leathern, a former Meta executive, recalls the day he realized the true extent of the company's ad fraud problem. As the head of business integrity operations until 2019, Leathern was responsible for ensuring that Meta's advertising platform was free from scams and prohibited activities. But a sweeping Reuters investigation has now put a price tag on Meta's tolerance for ad fraud: billions of dollars a year. The report, published Monday, found that Meta generated roughly $18 billion in advertising revenue from China in 2024, around 10% of its global revenue. However, internal documents showed that nearly one-fifth of that ($3 billion) came from ads tied to scams, illegal gambling, pornography, and other prohibited activity. Meta internally labeled China its top scam exporting nation, accounting for 25% of all scam and banned-product ads globally, according to the report. Meta's core social media platforms (Facebook, Instagram, WhatsApp) are blocked in China, but the company still earns billions from Chinese advertisers targeting global users. This raises questions about the company's ability to police its advertising platform and the impact of ad fraud on consumers. The investigation, Leathern told Fortune, illuminates several issues with both Meta and the broader Chinese ad market. "It appears that a variety of business partners that Meta has are not conducting themselves in an ethical way," he said. "There are also concerns about the lack of transparency and accountability in the Chinese ad market." Leathern's concerns are not unfounded. Ad fraud is a growing problem in the digital advertising industry, with estimates suggesting that up to 30% of online ads are fake or non-human. This not only wastes money for advertisers but also undermines the integrity of the advertising ecosystem. The Reuters investigation highlights the complexity of the issue. Meta's advertising platform is designed to be open and accessible, allowing businesses to reach a global audience. However, this openness also makes it vulnerable to scams and prohibited activities. The company has implemented various measures to combat ad fraud, including artificial intelligence-powered detection tools and human moderators. Despite these efforts, the problem persists. Leathern believes that the issue is not just about technology, but also about culture and accountability. "There needs to be a greater emphasis on transparency and accountability in the advertising industry," he said. "Advertisers need to be aware of the risks and take steps to protect themselves." The impact of ad fraud goes beyond financial losses. It also erodes trust in the advertising ecosystem and undermines the value of online advertising. As Leathern noted, "Ad fraud is not just a technical issue, it's a human issue. It's about people being misled and deceived by fake ads." The Reuters investigation is a wake-up call for the advertising industry. It highlights the need for greater transparency, accountability, and regulation. As Leathern said, "The industry needs to come together to address this issue and ensure that online advertising is safe and trustworthy." In the end, the story of Meta's ad fraud problem is not just about a company's mistakes, but about the broader implications for the digital advertising industry. As Leathern noted, "The issue is not just about Meta, it's about the entire ecosystem. We need to work together to create a safer and more trustworthy online advertising environment."