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Bots will cost global advertisers an estimated $6.3 billion in 2015, according to White Ops.

Bots will cost global advertisers an estimated $6.3 billion in 2015, according to White Ops.

Imagine a swarm of zombies loosed on Madison Avenue. Only you don’t have to imagine — it’s real! Global advertisers will lose an estimated $6.3 billion globally to bots in 2015, according to a newly released study by cyber security firm White Ops that attempts to quantify ad fraud.

The problem is computer malware — software programs that command cyber armies which crawl the web, masquerading as consumers and clicking on ads with abandon. In a world in which rates for digital ads correlate to “clicks,” “views” and interactions, the result is upward-spiraling digital ad payouts.

Digital advertising is big business. The $6.3 in projected fraud is based on an estimated $40 billion to be spent globally on display ads and another $8.3 billion spent on video ads for 2015, according to the study, presented in conjunction with the ANA (Association of National Advertisers).

Bot traffic is generated by ” everyday computers that have been hacked,” the survey explains. Using the hacked computers of “real people—people who are logged in to Gmail, sharing on Facebook, and buying on Amazon,” bots are then “targeted” by automated ad-buying programs. The insidious bots studied “put items in shopping carts and visited many sites to generate histories and cookies to appear more demographically appealing to advertisers and publishers.

Spanning 36 member companies, the 5.5 billion impressions that comprised the survey make it “the largest public study to date of bots in digital advertising.” Fun facts about bots: like feisty teenagers they’re more active evenings and on Saturdays, so the report urges judicious day-parting to avoid the pesky imposters.

“We’re all excited about digital, but when you get hit in the head with the fact advertisers are paying for things they shouldn’t be it takes your breath away,” ANA President Bob Liodice told a reporter for Dow Jones Business News reporting on the study for NASDAQ.com.

While the conniving cyber pests “can look like a sports fan, someone with a six-figure income, someone interested in buying a car or” — shameless! — “a grandparent looking for holiday gifts for grandchildren,” brands are not without defense. White Ops offers a multitude of diagnostic approaches. “White Ops does not come from the advertising world,” says company Co-Founder and Chief Scientist Dan Kominsky. “We’re hackers who have broken every major browser out there, who developed technology originally for the financial industry to detect malicious bank transfers. It just so happened it found ad fraud as well. There is a long term cat and mouse game to play with these sorts of attackers, and we’re the right type of engineers to fight this battle. Working with ANA, we’ve been able to significantly raise the likelihood that fraudulent efforts will be detected.”

Video ads seem more vulnerable to bot attacks was the conclusion of this investigation.

Video ads seem more vulnerable to bot attacks was the conclusion of this investigation.

The study documented high-fraud categories. Finance, family, and food domains had the highest percentages of bots, with 16–22 percent bots. Tech, sport, and science had the lowest bot percentages, ranging from 3–4 percent bots. And well-known publishers and premium publishers are not immune, according to the report: premium, direct-buy display ad campaigns at some well-known sites showed bot percentages higher than 10% (at least one as high as 19%).

Layer upon layer of fraud camoflage is peeled away in the study, including how bots can be actively cloaked during campaign monitoring periods, that bot-heavy sites feature less original content and more ads-per-page, and use more third-party traffic monitoring than do more authentic domains. Malware-fueled ad injection can also insert fraudulent messages on sites where they are not authorized to appear, making victims of the publishers as well as the brand advertisers (although some publishers — particularly those who seek to boost traffic through paid third-parties — seem to wink and turn a blind eye to the automated activity.

Those interested in battling bot fraud are encouraged to download the 57-page report. “The bot problem represents a challenge to the entire value proposition of Internet advertising,” Kaminsky says. “Not only because bots, which don’t buy anything, offer no ROI, but also because they represent active engagement with criminals who have broken into the computers of the very customers we’re trying to sell to. Numbers like $6.3 billion in losses, and at least a quarter of video advertisements going into the night, are merely conservative estimates based on smoking guns — and they’re still too high. We can do better.”

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by Brandon Gutman
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Brandon is an expert connector and seasoned business development professional. As Principal of Brand Approved, he's led the advisory to become the bridge between brand marketers and best of breed service providers that are reshaping the industry.

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