Bot fraud, digital advertising's albatross, will suck $6.3 billion from the industry next year, according to a much anticipated report highlighting the threat from the Association of National Advertisers and WhiteOps.
Bot fraud is among the digital ad demons the industry has been trying to excise. The report outlines some of the risks associated with programmatic ad channels, but there are technology-minded players who feel such automated advertising networks could eventually solve the fraud issue.
Industry group Interactive Advertising Bureau recently set up a special task force called the Trustworthy Accountability Group to combat fraud. "Research like this is critical in building a program that will excise this type of criminal activity out of the supply chain," Linda Woolley, TAG's CEO said in a statement today. "Fraudulent traffic, as well as malware and IP piracy, are obstacles to the growth of the digital economy, and TAG is committed to eliminating them."
Here is the scope of the problem, per analysts at SunTrust Robinson Humphreys:
- Up to 50 percent of publisher traffic is bot activity, just fake clicks from automated computing programs.
- Bots account for 11 percent of display ad views and 23 percent of video ads.
- Digital advertising will take in $43.8 billion next year, and $6.3 billion will be based on the fraudulent activity.
- Even the top publishers setting up private advertising exchanges to cater to elite brands are unsafe. Ten percent of ad impressions from such premium programmatic campaigns are from bots.
- Between 3 percent and 31 percent of programmatically bought ad impressions were found to be from bots, with an average of 17 percent.
- More than half of traffic from third parties claiming to lift publishers' traffic numbers comes from bots.
- Bots are corrupting retargeted ads because of more sophisticated user Web histories than actual users, attracting cookie-based ads. Nineteen percent of retargeted ads, the ads that are directed at an intended audience based on previous Web activity, are from bots.