Are Robots Eating Your Advertising Lunch?

If you are using digital advertising as part of your overall market, you may be throwing away up to half of your budget thanks to robots hard at work on the web.

According to Susan Krashinsky of the Globe and Mail, “The advertising industry is scrambling to combat the growing threat of ‘ad fraud,’ computerized bots that fool advertisers into thinking they are reaching consumers.

“By some estimates,” Krashinsky continues, “this illegitimate online traffic means that for some brands, as much as 25 to 50 per cent of the money spent on online ads is wasted.”

Yikes. That is definitely going to put a crimp in your online ROI.

This issue comes to light at a time when marketers are just beginning to get pretty good at tracking clicks and web traffic to help understand exactly what their clients are getting out of their ad spends. This revelation throws those calculations right out the window.

“[Advertisers are] trying to make decisions about where best to spend the money, and the illegitimate traffic is screwing up some of the metrics,” said Chris Williams, president of the Interactive Advertising Bureau of Canada.

Krashinsky notes that it’s not just advertisers feeling the pinch of those tiny robot pincers.

“It hurts legitimate publishers already scrambling for profit in a digital world,” she notes.  “It further devalues an advertising medium whose rates already pale in comparison with traditional print media. And it hurts consumers, who are targeted with malicious software to create these networks of bots.”

“Now that the context of an ad – the pages of a particular magazine, for example – is no longer at the heart of the transaction, shady players are able to make money by using bots to behave like the consumers that advertisers want to bid on (by sending them to auto websites to look like a person in the market for a car, for example),” Krashinsky explains.

As the systems for buying digital advertising becomes increasingly automated — traded through exchanges and sold to the highest bidder — we can expect to see the problem only get worse.

Industry organizations are getting involved to figure out how to combat the problem. Meanwhile, advertisers need to be aware that those traffic numbers their marketing teams are reporting may not be worth the paper they are wrapped in.