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Global cost of bot fraud declines

News, 25 May 2017
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SAN DIEGO: The financial damage that brands suffer from bot fraud will decline this year, but further room for progress remains in this area, according to a study from the Association of National Advertisers (ANA).

The latest Bot Baseline Report released by the ANA and White Ops, a digital advertising security firm, asserted that the "economic losses" related to bot fraud will reach $6.5bn globally this year, compared with $7.2bn last year.

Drawing primarily on the digital advertising efforts of 49 ANA members between October 2016 and January 2017, the analysis predicted such a decline would result even as new-media spending rises by at least 10% this year.

Beyond the high-level data, the ANA and White Ops stated that study participants had "made even greater gains" than the norm in tackling bot fraud – for instance, by demanding transparency on traffic sources from vendors and publishers.

If similar practices were adopted by enterprizes worldwide, the losses attributed to bot fraud would stand at $3.3bn this year – and fall more sharply, to $700m, if the performance of the top 20 players in the ANA's study was reflected by the mainstream.

"Marketers worldwide are successfully adopting strategies and tactics to fight digital ad fraud," Bob Liodice, the ANA's CEO, said.

"This is a powerful indicator that the war on digital ad fraud is winnable for those who establish proper controls and protocols. And that is exceptionally good news for the advertising, marketing, and media communities worldwide."

Granular figures from the study showed that 9% of desktop display spending was fraudulent, down from 11% the previous year. Video posted 22% on this measure in the latest research, a decrease of one percentage point year on year.

Mobile fraud, the study found, was "considerably lower" than expected, with less than 2% of nefarious activity connected to display ads or in-app environments.

Web video and pay-per-click fraud on wireless devices, however, were not incorporated in that total – and both are still "high and problematic" overall, the Bot Baseline Report argued.

Programmatic media buys, by contrast, are "no longer riskier" than acquiring general-market inventory, as media agencies have tightened their processes and controls in this space.

The best practices for brands looking to restrict the impact of bot fraud going forwards, the ANA and White Ops suggested, include refusing payment for non-human impressions.

Avoiding "excessive" targeting that encourages fraud, and urging large digital media firms to permit third-party fraud detection as accredited by the Media Rating Council, should also be high priorities.

Data sourced from Association of National Advertisers; additional content by Warc staff

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