Retailers Waste More Than Half Of Digital Budgets On Bot Traffic

by Laurie Sullivan , December 19, 2014

Suspicious Web traffic in the U.S. rose 36% sequentially in the third quarter of 2014, and bot traffic grew by 35%. Data released Friday identifies 55% of the traffic on retail sites as suspicious with 34% of traffic confirmed as bot. The data defines "suspicious" as non-human behavior.

U.S. retailers could waste about $4.6 billion of eMarketer's projected $11 billion spent on digital advertising this year on bot traffic fraud, estimates Solve Media. The company's latest Quarterly Bot Traffic Market Advisory focuses on U.S. retailers.

Solve Media CEO Ari Jacoby believes 2015 will become the year of verified human audiences. Media companies are "demanding to purchase only human ad traffic and viewable ads."

Brands waste millions of dollars annually. If Bloomingdale's spends $200 million annual in digital, "we estimate $68 million of that could be wasted on bot traffic," estimates Jacoby.

Automotive, consumer product goods and retail were hit hardest, mainly because these industries are the heaviest users of data targeting and retargeting. The three markets spend the most on digital advertising. While fraudsters follow the money, these industries also use the most retargeting and "probabilistic" data-targeting techniques.

Bots can more easily follow paths that imply intent rather than confirm it. The bots look for signals that assume the consumer wants to buy a car, rather than survey data, where the consumer tells the brand they are in the market for a new car. It's easier for bots to simulate the process related to probabilistic data because there is no definitive answer.

Mobile advertising continues to quickly become a target. eMarketer estimates that retailers will spend 37%, or $4.09 billion, on mobile advertising in the U.S. in 2014. Solve Media believes bots affect between 5% and 6% of that retail mobile ad traffic, meaning retailers waste on bots about $245 million of their mobile advertising budgets.

"When the numbers are compiled, we think it will get worse in the fourth quarter," Jacoby said.

"Scale and cash money" photo from Shutterstock

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3 comments about "Retailers Waste More Than Half Of Digital Budgets On Bot Traffic".

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Bill Duggan from ANA, December 20, 2014 at 1:08 p.m.
Per the just-released ANA/White Ops report, “Fraud in Digital Advertising,” bot fraud is everywhere. Study results are available here -- http://www.ana.net/content/show/id/botfraud.
Of relevance to this story, White Ops has historically observed that campaigns around time-sensitive releases such as retail sales, movies, and TV shows are unusually vulnerable to bot activity because they have very specific delivery windows that can exacerbate the bot problem.
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Craig Mcdaniel from Sweepstakes Today LLC, December 22, 2014 at 11:08 a.m.

The big part of this problem is being over looked. This is when Google demanded that the publishers redesign their websites from their own standards of three ads above the fold to two or even one ad above the fold three years ago, this was the start of the problem. Google wanted faster page load speed at the expense of the actual ads being viewed. They also wanted better contents on the page. While bot traffic I am sure has much to do with the problem, I still go back to what Google did to create the problem in the first place.

Sandra Lee from Luise, December 23, 2014 at 11:36 a.m.

Today we live in time of Internet and digital development. And the part of online advertising is quite big, because people spend more time online and pay attention to the different blogs and the companies understand how to grab their attention. I think that there are many special programs that prevent bots from registration on sites and other activity. People use loan service operating online and get quick monetary assistance, but this service is completely secure. So I guess you should choose only that sites that you can trust and avoid any financial frauds.