Automated bots trigger $7.2 billion advertising losses

Automated bots are costing advertisers an estimated $7.2 billion loss, as per a new study conducted by the Association of National Advertisers and Security Vendor White Ops. The study revealed that it isn’t just a simple click fraud, but an elaborate process that makes use of multiple components of the online ad delivery system.

Bots are automated and can help trigger non-human clicks and ad impressions that end up costing advertisers money, in turn, generating revenue for the bot owners. In 2014, the ANA/White Ops study found that bot advertisers had fraud percentages of 2 to 22 percent, which grew to a range of 3 to 37 percent for 2015.

Many organizations tend to think of ad fraud as just being about click fraud, but White Ops CEO Michael Tiffany said that is not the case. With click fraud, the fraudster uses a mechanism to click on a cost-per-click ad, generating revenue for the ad network, but costing the advertisers for the click. Tiffany explained that today most online ad spending is for display advertisements, including banners and video ads. Large brand marketers, for example, are not advertising online just to drive traffic to their own Websites, but rather to educate and market a brand message.

Tiffany said that most fraud operations make their money through a number of mechanisms. Tiffany explained that a bot fraud Website can make money by having a Website signed up with an advertising network and then serving ads whenever a visitor arrives.

Bot fraud operators buy clicks with a traffic broker at a low price rate,” Tiffany said. “When the visitor arrives, the page is filled with banner ads.”

Tiffany explained that the banner ads are paid for by a brand advertiser. The revenue for the display ad is split between the advertising network and the site publisher.

Another piece of the online ad threat landscape is “Malvertising” in which an online ad had links to some form of malicious content that infects a user with some form of Trojan or exploit payload.

Malvertising is largely a mass exploitation exercise to infect users. There are different types of malicious infections, including ones that turn victimized systems into zombies that can then become part of an ad fraud botnet, helping to generate page views and clicks.

Here, the money that is generated from ad fraud enables botnet economics to work. If it was not profitable, then the companies indulging in these activities would have turned to new businesses.

So, what should be done?

Tiffany feels that in most cases, third parties play the game of hijacking ads and so advertisers should get some third party monitoring companies on-board to expose ad frauds of bots, as a part of ad placement verification and click quality.

Additionally, advertisers should hold publishers and ad networks as supporters of these frauds and should sue them heavy.

Google and Yahoo have a separate entity working to eradicate such bot frauds. But still the menace hasn’t subsided completely.

What is your feeling on this menace?

Share your views through comments section below

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