By Jack Marshall
Marketers are wasting billions of dollars on online ads that
real consumers never see, according to a new study by the
Association of National Advertisers and ad fraud detection firm
White Ops Inc.
The industry has been battling the scourge of fake traffic from
"bots," computer programs that disguise themselves as real users to
defraud advertisers. But until the comprehensive new study, there
was little authoritative data available on the extent of such
fraud.
White Ops, which tracked online ad purchases by 36 major U.S.
brands between August and September, found that 11% of online
display ads were prompted to appear by bots. The problem is worse
in online video: The study found that 23% of video ads purchased
were wasted on fraudulent traffic.
Advertisers could lose more than $6 billion globally to ad fraud
in 2015, White Ops estimated, reaching that number by applying the
fraud levels observed in the U.S. to the $48.3 billion
PricewaterhouseCoopers estimates will be spent on display and video
ads world-wide next year.
Several big ANA members participated, included Anheuser-Busch
InBev NV, Johnson & Johnson, Verizon Communications Inc., Ford
Motor Co. and Wal-Mart Stores Inc. Marketers said they were eager
to better understand the problem and how it might be fixed.
"This study puts a stake in the ground. It's a wake-up call for
marketers to pay attention," said ANA president Bob Liodice.
Bots are computers hijacked by viruses that are programmed to
visit sites and mimic human behavior, creating the illusion of
authentic Web traffic to lure in advertisers. Contrary to what many
in the industry believe, that bot traffic doesn't exist just in the
dark corners of the Internet, White Ops found; it infects
mainstream sites and services, too. A quarter of the bot traffic
logged during the study was found across the top 1,000 sites on the
Internet, according to White Ops Chief Executive Michael
Tiffany.
"The most interesting part of this study to me is not the
top-line numbers; it's that fraud is happening in the well-lit
parts of the Internet," Mr. Tiffany said.
U.S. display and video ad spending combined is forecast to grow
from $17.1 billion in 2014 to more than $23 billion by 2018,
according to PwC estimates.
Marketers say they want to invest more of their ad budgets in
digital advertising, but warn the ongoing fraud problem will
discourage them from doing so.
"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," Mr. Liodice said.
Online display ads bought through automated or "programmatic"
channels were 55% more likely to be served to bots than display ads
purchased through other channels, according to the study. Some
advertisers said they expected the discrepancy to be even
higher.
"It was helpful for us to learn that this is a problem that
affects everyone, and that the method of procurement didn't make as
much of a difference as we thought it might," said Fernando
Arriola, vice president of media and integration at ConAgra
Foods.
Marketers say they hope the ANA research will force publishers,
ad brokers, and agencies to police ad fraud more aggressively. For
starters, they plan to begin including language in their agreements
with online publishers and other suppliers to specifically address
"nonhuman" traffic. The ANA recommends that all marketers take that
step.
"There's always been the perception that fraud has been there,
but the scale and scope has always been a mystery," said Ron Amram,
senior media director at Heineken USA, which participated in the
study. "Finally we have the ammunition and the technology to deal
with it."
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