Botnets Will Cause $US11.6 Billion In Wasted Ad Spending This Year

Bot waveAP Photo/Darko VojinovicA new study says bots threaten to waste $US11.6B in ad spend in 2014.

Perhaps one of the biggest barriers to advertisers spending more of their money online is how much uncertainty exists as to whether anyone will actually see the ads they pay for.

That’s because millions of ads are being shown not to human beings who come across them while surfing the net for information or entertainment, but by bots programmed to impersonate human web traffic.

But while the issue of fraudulent bot traffic has gotten a great deal of coverage in the advertising and technology media over the past year, a new report suggests that the problem is getting worse instead of better.

According to Solve Media, which gives publishers tools to ensure that their visitors are human, the global display advertising industry will waste a staggering $US11.6 billion in 2014, up 22% from the $US9.5 billion the company estimated was wasted in 2013.

Solve Media came to its conclusion by monitoring traffic at the 7,500 publishers who use its services, and then comparing the data with the $US48.2 billion ZenithOptimedia predicts will be spent on display advertising in 2014.

Though Solve Media CEO Ari Jacoby believes the problem will get worse before it gets better, he was cheered by what his company found when it surveyed 600 marketers, publishers, and media buyers about bot fraud. The survey found that 34% of online publishers plan to implement anti-bot solutions in 2014, a 125% year-over-year increase.

In addition, 59% of agency media buyers surveyed said they saw bot traffic negatively impacting the performance of their online campaigns.

“We were very surprised by these results,” Jacoby said. “It indicates that the community is not only taking notice, but it’s beginning to take action.”

For long, the industry has had trouble incentivizing individual players to crack down on bot fraud. The publishers closest to the issue won’t make money in the short term by telling their advertisers they’ve been scammed by the companies they paid to market their content and drive traffic, and media buyers look sheepish telling brands that they’ve spent their budgets on ads nobody sees.

What’s more, Jacoby says, the hackers who perpetuate click fraud are extremely talented and have a pretty obvious incentive to make sure they don’t get caught.

“It’s a bit like the war on drugs,” Jacoby said. “There are a ton of people perpetrating crimes, in lots of cases there’s no violence to report, and it’s an unusually profitable exercise that more and more people find appealing. And so, it grows.”

Solve Media’s technology uses CAPTCHA technology to prove that visitors to a web page are human by forcing them to read a block of text and type the letters and numbers they see. This then opens up advertising opportunities for brands that want people to type in a message like “Just Do It” or “I’m Lovin’ It,” and Solve Media takes a cut of the publisher’s advertising profits from the new inventory.

Now that brands are getting wise to click fraud, Jacoby said, more and more are beginning to demand that publishers use anti-bot solutions like Solve’s and threatening to advertise elsewhere if they don’t.

“The thieves are going to be really smart, so it’s a cat and mouse game,” Jacoby said. “I think it will get worse before it gets better on a macro level. The problem is quite solvable, but it’s going to take industry-wide participation.”

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