The Bot Baseline: Fraud in Digital Advertising

Advertisers will lose $7.2 billion globally to bots in 2016

In 2014, White Ops and the Association of National Advertisers (ANA) partnered to release the 2014 Bot Baseline report, considered by many to be the seminal report on advertising fraud. The 2014 study helped provide the industry with a better understanding of the impact of fraud on the online advertising ecosystem and provided a series of action steps to help stakeholders reduce fraud.

The Bot Baseline: Fraud in Digital Advertising (Full Report)

In 2015, White Ops and the ANA worked together again to repeat the study, this time with a larger group of participants: 49 advertisers versus 36 in 2014. These participants deployed White Ops detection tags on their digital advertising to measure bot fraud, or non-human traffic. Data was collected over 61 days from August 1 to September 30, 2015.  All participants received proprietary information on their buys. The aggregate data is reported in the 2015 Bot Baseline study, and highlights are provided in the Key Findings Report and are below::

  • In 2015, advertisers had a range of bot percentages varying from 3 to 37 percent, compared to a 2 to 22 percent in 2014. But the overall rate of fraud was basically unchanged.
  • Media with higher CPMs (cost per thousand impressions) was more vulnerable to bots, as these segments provide a stronger economic incentive for botnet operators to commit fraud.
  • Sourcing traffic (any method by which publishers acquire more visitors through third parties) results in greater fraud. Sourced traffic had more than three times the bot percentage than the study average.
  • Fraud varies by buy type.  Direct buys had lower fraud. Programmatic buys had greater fraud.  Programmatic video ads had 73 percent more bots than the study average.
  • The annual financial impact of bot fraud ranged between $250,000 and $42 million for the 49 participating advertisers and averaged about $10 million per participant.  The advertising industry overall could lose approximately $7.2 billion globally to bots in 2016.

The report provides a number of action steps for the industry to fight fraud going forward, including:

  • Be aware and involved.
  • Understand the programmatic supply chain and request inventory transparency (especially programmatic video buys that tend to have higher CPM and higher fraud levels).
  • Request transparency for sourced traffic.
  • Include language on non-human traffic in terms and conditions.
  • Use third-party monitoring to ensure compliance with anti-fraud policies.
  • Require media quality measurement vendors to demonstrate effective anti-fraud technology and provide measurement transparency.
  • Announce your anti-fraud policy to all external partners.
  • Support the Trustworthy Accountability Group.
ANA/White Ops Study Reveals Bot Fraud Will Cost Marketers More (Press Release)

Advertisers are expected to lose an estimated $7.2 billion globally this year as a result of fraudulent impressions, or bots, according to a new study. The study, conducted by the ANA (Association of National Advertisers) and White Ops, a leader in online fraud mitigation for digital advertising, also concluded that fraud levels are relatively unchanged compared to the results of a similar study conducted a year ago. The press release is here.

About the ANA
The ANA (Association of National Advertisers) provides leadership that advances marketing excellence and shapes the future of the industry. Founded in 1910, the ANA’s membership includes nearly 700 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. The ANA also includes the Business Marketing Association (BMA) and the Brand Activation Association (BAA), which operate as divisions of the ANA, and the Advertising Educational Foundation, which is an ANA subsidiary. The ANA advances the interests of marketers and promotes and protects the well-being of the marketing community.

About White Ops

White Ops is the leading provider of cyber-security services for the detection and prevention of sophisticated bot and malware fraud. Unlike traditional approaches that employ statistical analysis, simple blacklisting, or static signatures, White Ops effectively combats criminal activity by actually differentiating between robotic and human interaction within online advertising and publishing, enterprise business networks, e-commerce transactions, financial systems, and more, allowing organizations to remove and prevent fraudulent traffic and activity. By working with customers to cut off sources of bad Internet traffic, White Ops makes bot and malware fraud unprofitable and unsustainable for the cyber-criminals — an economic strategy that will eventually eradicate this type of fraud. White Ops is a member of W3C.