TLDR: AI-powered ad fraud is predicted to intensify during India’s upcoming festive season, posing a significant threat to advertising budgets and campaign effectiveness. Industry experts warn of sophisticated bot activities mimicking human behavior, leading to wasted ad spend despite increased clicks and installs.
India’s highly anticipated festive season, encompassing Ganesh Chaturthi, Onam, Navratri, Diwali, and Christmas, is traditionally a period of heightened marketing activity. However, this year, brands face an escalating threat: AI-powered ad fraud. With a projected 10-12% increase in festive season ad expenditure, industry leaders are voicing serious concerns about the growing sophistication of fraudulent activities.
Vivek Kumar, Chief Strategy Officer at DViO Digital, highlighted the core issue, stating, “What’s really at stake isn’t just wasted media budgets; it’s the illusion of success during festive seasons.” This sentiment is echoed by Bharatesh Salian, President – Digital at Wondrlab, who recounted a troubling experience during last Diwali with a mid-sized electronics client. Despite a robust product and a comprehensive campaign across programmatic, reels, and influencers, the client observed a significant disparity: clicks and installs surged, but sales remained stagnant. Salian revealed, “It turned out bots were filling forms, clicking links, even installing the app. One fake shopper completed the entire onboarding journey in 1.7 seconds.” Fortunately, fraud detection tools intervened, flagging anomalies, pausing rogue sources, and saving nearly Rs 24 lakh in ad spend.
While AI has empowered marketers with refined targeting and optimized outcomes, it has also equipped fraudsters with more advanced tools. The rise of bots that convincingly mimic human behavior and click farms leveraging generative content has industrialized ad fraud on a massive scale. Kumar from DViO Digital advises caution: “If the data seems too good to be true, stop and question it. Without anomaly detection, everything looks like it’s working, but behind the curtain, something else is happening.”
Experts predict a 20-30% surge in ad fraud during festive and sporting events, with fraudsters capitalizing on increased ad activity. Saurabh Khattar, Country Manager – India, Integral Ad Science (IAS), noted that India, as a top 10 global ad market, has become a fertile ground for ad fraudsters due to its large population and relatively low labor costs, making it easier to establish fraudulent ad networks or bot farms without robust regulatory oversight. The various forms of ad fraud include “Made for Advertising” (MFA) sites, which are designed solely to host numerous ads on low-quality content, contributing to 23% invalid traffic on programmatic platforms.
Beyond ad fraud, AI is also being leveraged for sophisticated scams targeting consumers directly. McAfee’s 2025 Global Prime Day Scams Study revealed that cybercriminals are deploying AI to create highly convincing fraudulent schemes, including deepfake videos of influencers endorsing products and fake Amazon notification texts mimicking legitimate alerts. These messages often use urgent language to pressure recipients into clicking malicious links. During Prime Day 2025, McAfee identified over 36,000 fraudulent Amazon websites and 75,000 impersonation text messages. Despite 97% of Indian shoppers planning safety precautions, 71% expressed heightened concern about AI-generated scams during major retail events.
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As India’s festive ad expenditure is set to rise by 10-12% in 2025, driven by digital adoption and increased consumer confidence, the industry faces the dual challenge of maximizing campaign impact while combating increasingly sophisticated AI-powered fraud. The shorter 45-day festive window this year further emphasizes the need for precise tactical planning and robust fraud detection measures.
