“A massive chunk of the advertising market is based on smoke and mirrors, or even outright fraud,” says Matthew Ingram writing in Fortune magazine.[1]
After describing fraudulent activities such as “pixel stuffing” and “ad stacking”—to be discussed in a later post—and their dilatory effects on the online ad industry, Ingram says, “But the biggest fraud of all is the use of “bots,” software programs designed to mimic the activities of human browsers.”
Bot is short for robot as in the “software program known as a “robot,” “spider,” or “crawler” [that] scans web pages, follows links between pages and sites, collects information about websites, and indexes this information” used by browsers for compiling their databases.[2] This was the early use of bots, and they became familiar through Search Engine Optimization (SEO) efforts. A bot used to defraud online advertisers is more of a creepy “crawler.”
These evil bots are part of the problem of slowing growth for online advertisers. “Ad blocking is costing the industry $781 million a year—yet makes up only a sliver of the total $8.2 billion lost to major problem areas including bot traffic and content piracy,” observed a 2015 report from the Interactive Advertising Bureau (IAB) reported by Tim Baysinger in AdWeek. Baysinger adds that “The IAB argues ‘non-human traffic,’ or bots, create more than half the losses, around $4.6 billion.”[3]
The view doesn’t get better for 2016, “Online ad fraud driven by bots will cost brands $7.2 billion globally this year, according to a forecast in a new joint study by the Association of National Advertisers and White Ops,” according to another AdWeek article by Christopher Heine.[4]
Not all bots are bad, though.
Bots automate tasks that are repetitive and too costly to be done by humans, such as helping to monitor and improve SEO, “Increased mentions and links on other websites and online news sites may provide a significant boost in search engine rankings. This improvement may be measured by tracking the rankings in search engines that are popular in the geographies where the company operates. There are a number of tools (both free and paid) available online, that can automate the tracking process of search engine rankings for companies,” says Digital Marketing, the third book in the SMstudy Sales and Marketing Body of Knowledge (SMstudy® Guide) series.
Other online campaigns can benefit from bots as well, “Marketers managing e-mail distribution in-house will need to subscribe to a service that automates, tracks, and evaluates their e-mail campaigns,” according to the SMstudy® Guide.
So, how does a company protect itself against the bad bots?
"‘Some basics include knowing your supply chain partners and investigating new potential relationships using address information, tax IDs, and background checks,’" Nick Terlizzi, Partner, Ernst & Young LLP and a member of its EY Media & Entertainment Advisory Services told Baysinger. This suggestion also applies to ameliorating the damage done by content piracy.
"It also 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," says Bob Liodice, Association of National Advertisers president and CEO, in a statement reported by AdWeek.[5]
Until that marketing ecosystem is built, online advertisers will need to recognize that these bots are not the ones they are looking for and keep on moving.
For additional interesting and informative articles on sales and marketing, please visit SMstudy.com.
(Jim Pruitt, SMstudy staff writer contributed to this article.)
[1] Matthew Ingram. (July 1, 2015) “There’s a Ticking Time Bomb Inside the Online Advertising Market.” Fortune. Retrieved 5/25/16 from http://fortune.com/2015/07/01/online-advertising-fraud/
[2] Digital Marketing, book three of the SMstudy Sales and Marketing Body of Knowledge (SMstudy® Guide).
[3] Tim Baysinger. (12/1/2015) “The Online Industry is Losing $8 Billion a Year, and Ad Blocking Is the Least of Its Worries.” AdWeek. Retrieved on 5/25/16 from http://www.adweek.com/news/advertising-branding/how-online-industry-losing-8-billion-every-year-168389
[4] Christopher Heine. (January 19, 2016) “Bots Will Cost Digital Advertisers $7.2 Billion in @016, Says ANA Study.” AdWeek. Retrieved on 5/25/16 from http://www.adweek.com/news/technology/bots-will-cost-digital-advertisers-72-billion-2016-says-ana-study-169072
[5] Christopher Heine: previously cited
