Ugggh: The bot problem is getting worse
Advertisers will lose $7.2 billion to fraudulent online advertising this year
January 20, 2016
Media buyers, media sellers and advertisers are well aware of the bot problem that has plagued online advertising for years.
Bots generate fraudulent ad views, driving up the price advertisers have to pay for campaigns. Further, the advertiser misses out on reaching actual users who might buy their product.
The problem has been ongoing for years, and many industry groups have talked big about doing something to combat the issue.
Alas, their talk has yet to accomplish much. The bot problem is getting worse by the day.
That’s according to a new study from the Association of National Advertisers and online fraud prevention company White Ops, which finds that losses to fraudulent ad impressions will rise by nearly $1 billion this year.
Last year advertisers lost $6.3 billion to bots. This year that will jump to $7.2 billion, reflecting an estimated 15 percent growth in digital advertising that will correlate to greater levels of fraud.
“While everyone is disappointed how much of our campaigns are not seen by humans, we can’t forget that this kind of information is relatively new. While we suspected this to be true since the online adverting was created, we didn’t have the technology until recently,” says Barry Lowenthal, president at The Media Kitchen.
The study predicts the rate of fraud will not decrease for the immediate future, noting that there have been no successful wide-ranging bot-blocking initiatives.
Well, media sellers benefit a lot from them, as do agencies that book the business. Advertisers are the only ones who are hurt, but having no options to combat it, they are inclined to accept it as the price of digital advertising.
And perhaps most worrisome, bots are getting smarter every day.
“Bots spoofed viewability, showing nearly the same viewable rates as humans. Bots fooled list-based prevention technologies in programmatic buys,” the report says.
The study finds the higher the CPM, the more vulnerable the advertiser is to fraud. There’s more incentive for bot operators to commit fraud with higher-priced ads, because they generate a larger return.
Display ads with CPMs above $10 had a 39 percent higher bot rate than lower-CPM media, according to the study, while video ads with CPMs of $15 or above had a 173 percent higher bot rate.
The overall picture is of an industry that’s unable to harness this huge problem, and that is of great concern to media buyers, whose clients are becoming increasingly wary of online’s fraud issues.
“My clients need to know that their ads are reaching the right people and not bots,” one buyer tells Media Life.
“You have no idea if your ads are even running exactly where they are supposed much less the bots that are eating away at delivery of impressions. We have to be able to measure this more accurately for both the agency and the client.”
Lowenthal says the problem may never go away complete, though he thinks strides have been made in the fight against bots.
“When you’re talking about a programmatically led business involving computers talking to computers, there will always be an opportunity for hacking and fraud. We will get better and faster at detecting fraud, but I think some fraud will always occur,” he says.
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