Advertisers to lose $6.3 billion to fraud in 2015

According to new research, advertisers are being swindled out of billions by cybercriminals looking to cash in on Internet advertising.


A new research report reveals that advertisers will lose as much as $6.3 billion next year to cybercrime and bots which mimic human engagement.

The study, "The Bot Baseline: Fraud in Digital Advertising," conducted by security firm White Ops and the Association of National Advertisers (ANA), estimates that billions will be lost next year due to the use of bots systems.

Bots are automated entities which mimic the behavior of humans engaging with an advert -- whether clicking on a link or watching a video -- which dupes an advertiser into believing they have an audience. The cybercriminal sets up fake ads and websites, uses bots to deliver fake click-rates and non-existent audiences, and the advertiser pays out without any benefit.

It is often the consumer themselves who are inadvertently acting the slave in a bot network -- as computers compromised by malware can be added to a bot chain, becoming an additional node to generate fake ad impressions.

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The study tracked 36 major ANA member companies including Ford, Honda, Home Depot, Verizon, Pfizer and Walmart and their online advertising campaigns -- 181 in total -- from August to October. The researchers discovered that major brands are just as vulnerable to being duped as businesses which invest in low-price ads, and 5.5 billion ad impressions in total were analysed.

Out of almost three million websites, there were only thousands of fake websites, but one-quarter of bots discovered acted upon Alexa's Top 1,000 websites. The bots inflated traffic levels, monetising streams by 5 to 50 percent, according to the researchers.

Michael Tiffany, the CEO and co-founder of White Ops said:

"We found a lot of bots suddenly inflating the audience of websites we recognize that are clearly not being run by international organized crime."

In one instance, the team found 98 percent of video ads -- costing a premium -- on a lifestyle website were viewed by bots, although in general this rate fluctuated from a few percent to 100 percent in bot traffic. The report states:

"Aggregators and middlemen gain reach, ensuring they never lack inventory to sell, and a diversity of bot profiles that match any conceivable audience segment. Publishers inflate their apparent audience size and pocket the difference between their traffic acquisition cost and the revenue received from advertisers."

While there hasn't been much data to hand to understand the place of bots in the advertising realm, with a predicted loss of $6.3 billion in 2015 from an estimated $5 billion this year, the report may spur brands on to take action. However, bots are not easy to detect or quell, so advertisers should take the first step and at least attempt to detect them by analyzing ad impressions and patterns.

Read on: In the world of security