According to the latest research, the Association of National Advertisers (ANA) estimates that bot fraud now costs the industry $7.2bn -- up nearly a billion in a year. Elsewhere, MAD London columnist Jason Mander has estimated that ad blocking is now nearly as prevalent on mobile as the desktop -- in Europe that's a rate of 38% on desktop compared to 30% on European mobiles.
I don't want to be clucking around here saying the sky's falling in, but to pretend all is OK would be akin to King Canute rushing down to the coast to turn the tide around. Let's just think at those figures, in sterling. That's the best part of half a billion pounds per month, roughly a hundred million pounds being burned globally every week to no other end than financing cybercriminals. If you then factor in that modest estimates suggest 20% are blocking ads across Europe, and perhaps even bear in mind that Mander's latest figures suggest this is more like one in three, then you have a very bleak scenario.
Sorry to turn the gloom factor up even further, but you then have to consider that according to the ANA, ad fraud is 73% more prevalent with programmatic. The researchers also found that video ads and those designed to reach a high-value demographic are also more susceptible to fraud. In other words, what you have suspected all along is true. Machines buying display from machines is more open to bot fraud and criminals are clever enough to make fake sites that offer video spots and appear to be popular among niche audiences that advertisers will pay more to reach.
If you think about it, we've all known this for some time. A bot net can't put on a suit, go to conferences, arrange sales meetings, press the flesh and do the deal. It absolutely stands to reason that the networks that opened up the door to ad fraud would see bot nets swarming on to them once programmatic became more prevalent. All fake sites have to do is convince a machine they are real and frequented by their target demographic and the site is good to go, stacking ad behind ad which are never seen even by the robots that are programmed to click on them.
The budgetary waste of appearing only to fraudster's code or being blocked is one thing -- but the ultimate loss is more than financial. Nobody is even trying to kid anyone else in this industry any more than display is about response. It's about awareness and if, say, half of your inventory is not seen by the target demographic you're looking to inform, then the damage to the brand is not just ad dollars potentially going down the drain. It's the simple fact that you thought you were firing a cannon on a major campaign and ended up with more of a damp squib. There may be a chance to get a refund on inventory that has been blocked or landed on a fraudulent site, but that misses the point around the awareness you were thought you had built in to a campaign.
So, users of programmatic beware. If you're using programmatic and video to reach audiences, programmatic video even, then be twice as aware. The fraudsters find programmatic will happily pay for their life of crime and they are obviously more keen to target higher margin inventory than the lower end variety.
I don't know about you -- but looking at this I'm wondering whether a few marketers might just be thinking they were safer off leaning toward direct deals. Sure, there may not be the flashy ad tech, but it appears there is more chance of getting what you paid for.