Google bolstered its claim to being the internet’s most trustworthy advertising company Friday when it announced that it had purchased Spider.io, a seven-person London company that works to prevent online advertising fraud.
Most consumers won’t care about the deal. But they might, in years to come, appreciate the way the transaction has the potential to lower the crime rate in Dodge City — which is how most people in adtech regard the web right now.
Online advertising’s badly kept secret is that it’s a pit of sharp practices and fraud. Business Insider recently noted that brands like Procter & Gamble and Unilever unwittingly run ads on X-rated sites because their adtech vendors are so shady.
If you’ve ever been bothered by sleazy ads turning up on respectable web sites or respectable ads turning up on sleazy web sites, then you’ll be interested in what Spider.io does. The company provides a range of services to help buyers and sellers of online advertising make sure the ads in question are actually being seen by human beings. The company’s business is split into two parts: one that provides software to determine whether an ad was placed on a part of a webpage where a person could see it, and one that works to root out fraudulent clicks that come from hacked computers surfing the internet outside the control of their owners.
Over the past year, Spider.io has made headlines for detecting several high-profile “botnets,” a term used to define a network of computers infected with malware that causes them to click on various websites, thereby forcing marketers to pay the websites for showing their ads to no one in particular. After Spider.io uncovered the Chameleon botnet about a year ago, it estimated the network had infiltrated more than 100,000 computers and was costing advertisers about $US6 million each month.
The Spider.io acquisition fits into Google’s larger plan to court advertisers by promising the greatest degree of assurance that the ads they pay for will be seen by real, live human beings. Already, the company employs hundreds of human beings tasked with scouring the internet for bad actors trying to cheat its system and is seen as the industry leader in eliminating ad fraud.
It has also led the way in providing advertisers with options to buy only the ads that people can see. This began in 2010 with the introduction of the TrueView product for YouTube, which only charges marketers for ads when users click to see them. At the end of 2013, it became the first big company to allow customers to make automated display purchases that only included the ads Google determined to be “viewable” to the user (it’s possible Google will use Spider.io’s viewability technology to help make such determinations). At present, it’s estimated that nearly half of all online ads show up in places no one can see them.
In pursuing a strategy to aggressively combat click fraud and non-viewable advertising, Google is leveraging the dominance of its $US60 billion-a-year ad business by betting it can absorb the short-term loss of revenues it would have earned from selling non-viewable ads or those seen by robots.
As payoff, it hopes to profit handsomely from brands who will only want to buy ads from a company that can promise their money will not be wasted. With advertisers losing an estimated $US11.6 billion annually to click fraud, it’s possible some of them might even be willing to pay Google a premium for such a promise.
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