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Online ad fraud continues to plague industry

January 27, 2016 | By Rande Price, Research Director—DCN @Randeloo

Non-human traffic continues to drive digital ad fraud at a significant cost to marketers. While overall fraud levels are unchanged from a year ago, digital advertising spend globally is estimated to grow by 15% increasing the advertiser loss to $7.2 billion in 2016 from $6.3 billion last year, according to the Association of National Advertisers (ANA) in their newly released report with White Ops, a cyber security firm.

Additional key findings include:

  • Higher cost-per-thousand impressions (CPMs) were actually more vulnerable to fraud traffic. In fact, display CPMs over $10 had a 39% higher bot rates than lower display CPMs and video CPMs over $15 had 173% higher bot rates than lower video CPMs.
  • Programmatic ad buys displayed higher levels of fraud, especially among programmatic video. Programmatic display ads had 14% more bots than the study average, while programmatic video ads had 73% more bots than average.  Interestingly, programmatic buys targeting Hispanics were nearly twice as likely to result in bot traffic than programmatic non-Hispanic targeted ads.
  • Publishers who acquire traffic through third parties (sourced traffic) registered a higher level of sophisticated bots.

White Ops pic
The report advices marketers to continue working with The Trustworthy Accountability Group (TAG) and their recommendations. TAG was established last year by the IAB, the 4As and the ANA as an industry program to help eliminate digital advertising fraud and malware.

In addition, the report made the following recommendations:

  • Demand inventory transparency from your partners.
  • Request publishers to identify all third-party sources of traffic.
  • Consider adding language to insertion orders that notes there will be no payment for fraudulent impressions.
  • Use a third-party monitoring to monitor all traffic.
  • Ensure that your anti-fraud policies are followed by all external partners.

Importantly, advertisers can reduce bot fraud and their costs by using anti-fraud policies and technologies. It’s critical for the industry to still remain focused on fraud reduction.

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