A new report from the Association of National Advertisers points the fraud finger at programmatic advertising and sourced traffic.
The study by the ANA and White Ops, provider of online fraud mitigation services for advertisers, found that fraud levels were relatively unchanged from its 2014 study. At the same time, while bot volumes haven't dropped, digital spend has increased. So this year's global price tag for fraudulent impressions will be an estimated $7.2 billion.
Unsurprisingly, the more costly the ad, the more likely it will receive fraudulent impressions. Display media with CPMs over $10 had 39% higher bot traffic, while video ads with CPMs over $15 had 173% higher bot rates, according to the new study.
At a time when programmatic buying accounts for a growing slice of publisher revenue, the study found that programmatic display ads had 14% more bots than average, while programmatic video ads had a highly disturbing 73% more bots than average.
Eddie Schwartz, president of White Ops, wouldn't go so far as to say advertisers shouldn't buy programmatically, but, "it's caveat emptor. Programmatic requires tighter collaboration between the buyer and the programmatic supplier," he said. "Advertisers should tell suppliers, 'I'm concerned about these stats. What are you going to do to make me feel good about this buy and make me feel comfortable that we're not going to see these bot levels?'"
Sourced traffic is another danger area, the study found. It's more than three times more likely to contain bots than unsourced traffic.
To mitigate this, the ANA's recommendations include requiring publishers to identify all third-party sources of traffic and providing that buyers can reject sourced traffic and only run ads on the publisher's organic-traffic site.
Another recommendation was that advertisers should consider writing into insertion orders that they will not pay for fraudulent impressions. But the whole point of fraud is to trick ad systems, right? "There will always be some level of things that are difficult to control," said Schwartz. "What is important is stating the business principle to your suppliers."
He believes that some suppliers, when confronted with such language, will immediately take steps to lower their fraud rates. The lazier ones may not be that diligent. But when an agency refuses to pay part of a bill, "eventually, that will create pain for them," he said. "We want to starve the money out. As long as people keep paying for fraudulent impressions, the criminals will stick around."
A November 2015 study by the Interactive Advertising Bureau put the total annual cost of invalid traffic at $4.6 billion. It said the total cost of ad fraud, including fraudulent publisher practices and lost revenue from paid content, as well as bot traffic, at $8.2 billion.
Forty-nine ANA member companies participated in the 2015 Bot Baseline study, deploying White Ops technology to measure bot fraud in close to 10 billion online impressions across 1,300 campaigns that ran from August 1 through Sept. 30, 2015.
ANA Group Vice President Bill Duggan said, via email, he was disappointed that only a small percentage of advertisers surveyed as part of the study thought that they should be responsible for combatting fraud. Thirty six percent of respondents put that responsibility on the agency; 21 percent put responsibility on the publisher; only 17 percent put responsibility on the advertiser. The remaining 26 percent said all parties should be responsible.
The study did show that advertisers who have proactive policies to combat ad fraud can make a difference. Duggan said, "So clearly, marketers who take responsibility by setting such proactive policies are able to reduce fraud."
