Yahoo! Japan to waive $189 million ad revenue after detecting fraudulent clicks

Yahoo! Japan will waive $189 million charged to advertisers after deciding they were fraudulently charged, the portal's corporate parent revealed on Tuesday.

"In fiscal 2023, Yahoo! Advertising determined that approximately 96 million advertising materials were not approved and that approximately 30.2 billion yen worth of advertising costs were invalid clicks, etc., and therefore will not be charged for them," stated LY Corporation – the entity formed during a 2020 merger between Yahoo! Japan and messaging app LINE.

LY specified that the amount is non-chargeable and therefore will not become an expense for advertisers. It is, however, a slug for investors – ¥30.2 billion ($189 million) is around 1.6 percent of LY Corp revenue.

While 1.6 percent of revenue coming from fraudulent clicks is enough to make any shareholder a bit grumpy, the news is not all bad. LY Corp's transparency report reveals overall ad quality is improving.

For instance, it detected a similar number of fraudulent advertiser accounts in 2023 (7819) compared to 2022 (7893) – but the number of unapproved ad materials declined significantly. In 2022, it counted over 133.5 million unapproved ad materials, but the very next year that number came in under 97 million.

The admission of ad fraud is a rare example of an online advertiser admitting to problems. The likes of Google and Reddit sometimes struggle to satisfy advertisers that actual humans click on ads they carry. Some fraudsters have been caught after looting millions.

The problem is not new. In 2018 we reported on the prevalence of ad fraud – including cases dating back to 2004. ®