Report: Bot Fraud Costs Advertisers $7.2 Billion Worldwide

By Kimberlee Morrison Comment

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Bots are a constant thorn in the side of the digital advertising industry. They are becoming more sophisticated, and thus more difficult to track and remove. And with the rampant fraud, advertising online might seem a futile endeavor.

A report from the Outdoor Advertising Association of America (OAAA) suggests that it’s time for digital advertisers to get realistic. The digital media industry continues to pour budgets into advertising, with bigger, more expensive campaigns, and much of that money is wasted on bots.

According to the report:

Last year globally, display media with cost-per-thousand-impressions (CPMs) over $10 received 39% more bot traffic than lower CPM media. Video media with CPMs over $15 had a 173% higher bot rate than lower CPM media. Going programmatic, the holy grail of hands-off media planning, makes matters worse. Programmatic display ads attracted 14% more bot traffic than average while programmatic video invited 73% more bots.

In addition, online audiences are adopting adblockers at high rates across the globe. Approximately 40 percent of all users have an adblocker installed, up 12 percent compared to mid 2015. These adblockers affect everyone in the industry, including Google, which loses up to $6.6 billion per year. Non-viewability may be wasting more than $7.4 billion per year, bot fraud may cost more than $7.2 billion globally, and reporting fraud may be as high as 25 percent.

Ignoring this problem is creating a “reality gap,” according to the report. Advertisers need to make changes to their methods, and they need to find ways to deal with bots and adblockers in particular. Digital advertising budgets are ever increasing, but when the loss is so high, this is not a problem easily solved by outspending fraud and pushing more ad units.

Begging for engagement from social media and internet users isn’t going to work either. Audiences want genuine value for everything they view online, not just the content they seek but the ads they are exposed to as well. In fact, readers don’t mind sponsored content, especially when it comes from influencers. Identifying your core audience, and engaging with them correctly will do a lot more than wasting another billion dollars.

For information on OAAA’s real world meets online campaign, download the full report.

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