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Bot fraud will cost advertisers $7bn in 2016

Advertisers will lose $7.2bn to fraudulent ads this year, with campaigns delivered using programmatic media buying technologies identified as a key area of concern, according to a study released today (January 19).

While bot volumes have remained steady, digital spend has increased, leading to the increase in estimated global losses to ad fraud, according to a study published by US-based trade body Association of National Advertisers (ANA).

The ANA has paired with online White Ops, an outfit that specialises in detecting online ad fraud, to produce the global study, to produce the study which states that the fight against online ad impressions generated by fraudsters is "not going well".

In all, advertisers are set to losse $7.2bn to fraudsters this year, with Bob Liodice, ANA president and CEO, describing the criminal activities of online ad fradusters as a travesty.

“The staggering financial losses and the lack of real, tangible progress at mitigating fraud highlights the importance of the industry’s Trustworthy Accountability Group in fighting this war," he added.

"It also underscores the need for the entire marketing ecosystem to manage their media investments with far greater discipline and control against a backdrop of increasingly sophisticated fraudsters.”

The findings, based on a survey of 49 ANA members plus an analysis of 10 billion online ad imporessions across 1,300 campaigns, also reveal that less than a third of participants experienced a decrease in their bot rates between 2014 and 2015.

The traffic analysis of the survey found that in 2015 advertisers had a range of bot percentages varying from three to 37 per cent, compared to two to 22 per cent 12 months earlier.

With ads booked using programmatic media buying technologies on the rise, the study found that such media buys displayed higher levels of fraud compared to direct deals. In fact programmatic display ads had 14 per cent more bots than the study average, while programmatic video ads had 73 per cent more bots than average.

The reason for video ads (in particular those delivered using programmatic technologies, being the target of fraudsters is that they are attracted to the higher CPMs of video (compared to display), plus campaigns delivered using such technologies are subjected to less human scruitny.

White Ops found that display media with CPMs over $10 had 39 per cent higher bots than lower CPM media, while video media with CPMs over $15 had 173 per cent higher bot rates than lower CPM video media.

White Ops CEO Michael Tiffany said: “In problems of security and fraud, the ‘attacker’s advantage’ of only needing to find one weakness in a defense is well understood."

A full copy of the study is available upon request from the ANA.