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Fraud from bots represents a loss of $6 billion in digital advertising

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That’s a lot of fraudulent advertising.

Almost one-fourth of video ads and 11 percent of display ads are viewed by fake consumers created by cyber crime networks seeking to take a chunk of the billions of dollars spent on digital advertising, according to a new research report released on Tuesday.

The study, by digital security firm White Ops and the Association of National Advertisers, is one of the most comprehensive looks to date at the persistent criminal activity involving online advertising. Specifically, it addresses “bots,” automated entities that mimic the behavior of humans by clicking on ads and watching videos.

These bots siphon money away from brands by setting up fake websites or delivering fake audiences to websites that make use of third-party traffic. The report estimates that advertisers will lose $6.3 billion to bots next year.

The study included 36 ANA member companies, including Anheuser-Busch InBev SA, Ford Motor Co Verizon Communications Inc and Pfizer Inc.

 

(click here to continue reading Fraud from bots represents a loss of $6 billion in digital advertising – Yahoo News.)

If I were a corporation like Ford, Verizon or Pfizer, and I cared, I’d demand a meeting with my ad agency, and insist upon receiving a detailed audit of the last year of digital advertising. Well, maybe not, because then I’d discover that a lot of the annual budget was knowingly pissed away and my ad agency kept the commission anyway.

Bots are computers hijacked by viruses that are programmed to visit sites and mimic human behavior, creating the illusion of authentic Web traffic to lure in advertisers. Contrary to what many in the industry believe, that bot traffic doesn’t exist just in the dark corners of the Internet, White Ops found; it infects mainstream sites and services, too. A quarter of the bot traffic logged during the study was found across the top 1,000 sites on the Internet, according to White Ops Chief Executive Michael Tiffany.

“The most interesting part of this study to me is not the top-line numbers; it’s that fraud is happening in the well-lit parts of the Internet,” Mr. Tiffany said

Online display ads bought through automated or “programmatic” channels were 55% more likely to be served to bots than display ads purchased through other channels, according to the study. Some advertisers said they expected the discrepancy to be even higher.

“It was helpful for us to learn that this is a problem that affects everyone, and that the method of procurement didn’t make as much of a difference as we thought it might,” said Fernando Arriola, vice president of media and integration at ConAgra Foods .

Marketers say they hope the ANA research will force publishers, ad brokers, and agencies to police ad fraud more aggressively. For starters, they plan to begin including language in their agreements with online publishers and other suppliers to specifically address “nonhuman” traffic. The ANA recommends that all marketers take that step.

(click here to continue reading Advertisers Pay Billions for Bogus Web Traffic – WSJ.)

The thing is, savvy corporations already were aware of this problem:

Concerns over ad fraud, viewability and overall inventory murkiness are causing Kraft to reject up to 85% of all impressions offered via real-time ad marketplaces, Kraft’s Julie Fleischer said today at the Ad Age Data Conference in New York.

The massive number reveals that talk of digital advertising supply-chain corruption is indeed leading to action among top brands. Kraft, one of Ad Age’s 100 leading national advertisers, spent $35.9 million on digital advertising in 2013, according to Ad Age Datacenter.

“That 75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown,” Ms. Fleischer, the company’s director of data, content and media, said, referring to the rejected impressions. “Think about what this means for us as an industry. When we’re rejecting 75% to 85% of the impressions available, that’s a problem.”

(click here to continue reading Kraft Says It Rejects 75% to 85% of Digital Ad Impressions Due to Quality Concerns; Big Spending Advertiser Wants No Part of Fraud )

[Editor’s note – Full disclosure: a year or so ago, we met with a startup that purported to have invented tools and procedures that would ferret out this kind of digital advertising fraud, but nothing ever came of the meeting, we never used nor resold their services. I think a large advertising corporation ended up purchasing this startup]

Written by Seth Anderson

December 9th, 2014 at 9:22 am

Posted in Advertising

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