• by Laurie Sullivan  @lauriesullivan, May 24, 2017

Advertising spending should increase by 10% or more this year, but a study released Wednesday by the Association of National Advertisers (ANA) and White Ops estimates the economic losses due to bot fraud at $6.5 billion globally in 2017 -- down 10% from the $7.2 billion reported in 2016.

The Bot Baseline Report analyzes the digital advertising activity of 49 ANA members between October 2016 and January 2017.

"Extrapolating the results of the participants to the overall global market would result in 2017 fraud losses of just $3.3 billion — about half of the $6.5 billion general market projection," per the study.

ANA CEO Bob Liodice called the results of the study "a powerful indicator that the war on digital ad fraud is winnable for those who establish proper controls and protocols."

Key findings from the study include:

Traffic sourcing is still the major risk factor for fraud. Traffic sourcing, or the process of purchasing traffic from inorganic sources, was again a large source of fraudulent activity. The report said 3.6 times as much ad fraud came from sourced versus non-sourced traffic.

Nine percent of desktop display and 22% of video spending was fraudulent. This was a decline from the previous year, when display advertising fraud was reported at 11% and the fraud rate for desktop video was 23%.

Mobile fraud was considerably lower than expected. Overall, participants saw less than 2% of fraudulent activity in app environments and mobile Web display buys. This does not include fraud in mobile Web video or pay-per-click fraud, which remain high and problematic.

Fraud in programmatic media buys is no longer riskier than general market buys, as media agencies have improved filtration processes and controls.