• by Steve McClellan  @mp_mcclellan, January 19, 2016

The war on fraud is not going well, according to a new study. Advertisers are expected to lose an estimated $7.2 billion globally this year as a result of fraudulent impressions, or bots, according to the study, conducted by the Association of National Advertisers and White Ops, the online advertising fraud tracker. (Other studies have come up with similar estimates.) 

There has been little recent progress in curbing bot fraud — the study found that fraud levels are relatively unchanged compared to a year ago. 

Forty-nine ANA member companies participated in the 2015 Bot Baseline Study. Those participants deployed White Ops detection tags on their digital advertising to measure bot fraud. Data was collected from nearly 10 billion online advertising impressions across 1,300 campaigns over 61 days, from August 1 through September 30, 2015. 

Key findings from the report include: 

• In 2015, advertisers had a range of bot percentages varying from 3% to 37%, compared to percentages from 2% to 22% in 2014. But the average and overall rates of fraud were basically unchanged. Less than a third of the advertisers that participated in both surveys experienced a decrease in their bot rates. 

• Media with higher cost-per-thousand impressions (CPMs) were more vulnerable to bots. These segments provide a stronger economic incentive for bot-net operators to commit fraud. Display media with CPMs over $10 had 39% higher bot rates than lower CPM media. Video media with CPMs over $15 had 173% higher bot rates than lower CPM video media. 

• Programmatic ad buys displayed higher levels of fraud. Programmatic display ads had 14% more bots than the study average, while programmatic video ads had 73% more bots than average. 

• Sourced traffic (any method by which publishers acquire more visitors through third parties) continues to show a higher level of sophisticated bots, and was over three times more likely to contain bots than unsourced traffic.

Campaigns targeting certain demographics, or retargeting potential customers, typically resulted in more bots. For example, programmatic buys with Hispanic targeting were nearly twice as likely to encounter bot traffic than non-Hispanic targeted media. 

“The level of criminal, non-human traffic literally robbing marketers’ brand-building investments is a travesty,” said Bob Liodice, ANA president and CEO. “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.” 

The Trustworthy Accountability Group, known as TAG, was established in November of 2014 by the IAB, the 4As, and the ANA. It’s a joint marketing-media industry program designed to eradicate digital advertising fraud, malware, ad-supported piracy, and other deficiencies in the digital communications supply chain. 

Liodice added that the ongoing fraud problem “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.” 

White Ops CEO Michael Tiffany said that while parts of the industry have taken effective steps to combat bot fraud, “we are still facing an uphill battle to achieve broad acceptance of the need for deeper focus on the fraud problem, and ultimately to reverse these financial trends.” 

In addition to supporting TAG, the study recommends several steps that industry players should take. They include: 

• Understand the programmatic supply chain and request inventory transparency:Ask about the role of each player in the process and know your partner’s partners. 

• Request transparency for sourced traffic:Buyers should request transparency from publishers around traffic sourcing and build language into RFPs and insertion orders that requires publishers to identify all third-party sources of traffic. 

• Include language on non-human traffic in terms and conditions:Buyers should consider writing into insertion orders that they will not pay for fraudulent impressions. 

• Use third-party monitoring:Monitor all traffic with a consistent tool. 

• Ensure that your anti-fraud policies are understood and followed by all external partners.

Commenting on the study, TAG CEO Mike Zaneis stated that it should be considered a “call to arms” for the industry. “TAG was created just over a year ago to fight the types of criminal activities outlined in this report, including fraud, piracy, and malware, and the programs we've deployed in recent months will help the industry choke off the money flowing to criminals and create an evergreen market where marketers can be sure they are working with trusted partners.”

More on the study can be found here.