Online Advertising’s Big Problem: 36% of Views Are Automated
Recent comments by the Interactive Advertising Bureau's chairman suggest web traffic fraud is a serious threat to the field, and the danger is growing as automated forms of digital ad distribution become more common.
With online ad placement becoming increasingly automated, the digital ad industry has a problem on the other side of the equation: The traffic is becoming increasingly automated, too.
According to the Interactive Advertising Bureau, the rise of programmatic forms of online advertising are something of a double-edged sword, and it could create a challenge for advertisers and publishers alike.
A Serious Scope
At the group’s annual leadership conference in February, IAB Chairman Vivek Shah, CEO of Ziff Davis, spoke in tough terms about the scope of the problem and the industry’s need to address it.
“According to comScore, 36 percent of traffic today is generated by machines, not humans. That’s astonishing,” Shah said, according to Technorati. “If you peel the onion one layer, you see that an overwhelming majority of suspected nonhuman traffic comes from small publishers—not comScore 100 sites. The reason is simple. The ability to buy cheap bot traffic and arbitrage it via ad exchanges has created enormous financial incentive for bad-actors to engage in a deception that threatens the very integrity of our business.”
Shah described the situation as a “crisis,” the Wall Street Journal reported.
The comScore stat Shah cited is a 2012 estimate of machine-based web traffic from October 2012—some of which comes from legitimate sources, such as Google bots, but much of which comes from others. As Marketing Land notes, other estimates put suspicious web traffic levels at over 40 percent.
The Danger for Advertisers
With programmatic advertising becoming a bigger slice of the pie than ever—according to IAB statistics cited by AdAge in November, 72 percent of publishers utilize programmatic technologies, leading many of their advertisers to follow suit—it’s becoming more important to ensure the system’s integrity is strong.
As Shah noted in his February speech, without controls to ensure that automated ad systems are hitting human readers, advertisers could find themselves wasting money on fraudulent views and clicks.
“Don’t get me wrong, the introductions of exchanges and programmatic advertising are tremendous breakthroughs in our business,” the IAB chair told his audience. “But we also have a responsibility to deal with the unintended consequences. We’re supposed to be the most transparent, open, addressable, and accountable medium in the world. We’re too good for this.”