Advertisers Will Lose $6.3B Globally To Advertising Bot Fraud In 2015, ANA and White Ops Announce Action Plan
NEW YORK, NY — A study of bot fraud in the digital advertising industry has found almost a 25% of video ad impressions and more than 50% of third party-sourced traffic is fraudulent, according to the Association of National Advertisers (ANA) and online fraud detection firm White Ops.
The ANA/White Ops study analyzed 181 campaigns from 36 ANA member companies, which were tagged to identify bot fraud. During the study, 5.5 billion impressions in 3 million domains were measured over 60 days in line with industry spending patterns. Bot fraud originates from malicious sites with phony ad traffic that passes through both legitimate and “phantom” elements of the digital advertising ecosystem. Fraudsters collect payments from advertisers for non-human impressions.
Topline findings from the study conducted in August and September 2014 include:
- Botnet controllers hijack everyday consumers’ identities and home machines to conduct ad fraud
- Almost a quarter (23%) of video ad impressions were identified as bot fraud
- Eleven percent of display ad impressions were classified as bot fraud
- Publishers who bought sourced traffic from a third party, as a means to drive additional unique visitors to their site, had a bot fraud rate of 52% on that sourced traffic
- Programmatic display bot traffic averaged 17% bot fraud
- Bot fraud for retargeted ads was 19%
The study also revealed that bot fraud levels vary across the day with peak activity occurring when users are sleeping, but their computers are still awake, between midnight and 7am. Additionally, impressions coming from older browsers such as IE6 (Internet Explorer 6) and IE7 had fraud levels of 58 and 46%, respectively.
In response to the findings, the ANA, in collaboration with White Ops, has created an action plan for the key industry players — advertisers, agencies, publishers — to substantially reduce bot fraud. The action plan includes key tactical advice on how to structure business operations in a way that will protect against ad fraud. Among the recommendations are:
- Advertise During Waking Hours
- Demand Transparency for Sourced Traffic
- Include Language on Non-Human Traffic In Terms and Conditions
- Announce Your Anti-Fraud Policy to All External Partners
- Use independent monitoring and conduct ongoing fraud analysis of advertising traffic
In all, 17 recommendations have been put forth to help fight bot fraud.
“The findings from this study and our industry action plan reflect the joint mission of the ANA, IAB and 4A’s to create a trustworthy supply chain. The eradication of bot fraud is critical to the ongoing health of the internet and the ANA is taking the steps necessary to meet this challenge,” said Bob Liodice, President and CEO of the ANA. “This report identifies specific practices marketers, agencies and publishers can immediately implement to combat fraud and the fraudsters that perpetrate it. The ANA is committed to working closely with our industry partners to support this critical mission. We invite the entire ecosystem to collaborate and invest the necessary resources to reinvigorate trust and confidence in the digital supply chain.”
“This study confirmed some prior assumptions and fears, but it is not about sowing distrust or policing ecosystem partners,” said Michael Tiffany, White Ops CEO. “It’s about stopping outright criminal theft. Ad fraud is hugely profitable and is one of the major sources of funding for a global underground responsible for a broad spectrum of cybercrime. To protect this cash cow, adversaries are aggressive, smart and adaptable. As such, the results of this study should not be about building better mousetraps, but about driving substantive change in the industry to alter the economics for criminals, and ultimately drive them out of business.”
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