Ad Fraud to cost advertisers $7.2 Billion in 2016


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A study called The 2015 Bot Baseline Report concluded that advertisers will lose $7.2 billion in 2016.

The report breaks things down by media buys and what percentage are bots. The article goes on to look at ways advertisers can fight ad fraud.

From the article:

Released yesterday, The 2015 Bot Baseline Report estimates that advertisers around the world will lose $7.2 billion in 2016, as a result of fraudulent impressions. That number is relatively the same from last year, just a little higher to account for an increase in digital spend.

Report available here
The only sane way of doing business by affiliates will be the revenue-share model where the actual sale is the only measure of success that matters.

The pay-per-impression and pay-per-click models are way too flashy to attract the bad guys. The risk is taken solely by the advertiser. At least in the pay-per-sale model, risks are shared. It is a fair model.

Paying for unproductive traffic does not really make sense. Hopefully internet advertising evolves to pay-per-result as time passes.

...I know the pay-per-click keeps a plethora of free sites running, but if fraud rates reach the sky then it is time to put a limit.

Bots can fake impressions and clicks from IPs but they can't fake real sales on demand. The healthy option is to change the measure to reward honest webmasters. If their trafffic is good, then the better for them; by removing the losses due to fraud, advertisers are in a better position to give better rewards to the webmasters that really help them with conversions. Quite logical.
Wow, that is a very large sum of money to be losing from fraud - I didn't think it would be that much. What kind of bots are they talking about by the way? Automated scripts someone sets up on their own server or are we talking about hijacked botnet computers being commanded to carry out tasks by the botnet master? I know people used to run click exchange groups where people would click each others adverts by hand, but I don't know much about the automated bot side of ad fraud.
7.2 billions for a bunch of bots fraud is hardly to be overlooked by an advertiser. Indeed, pay-per-click models are an attractive target for people with dubious intentions. The investment risk could be worth it for some marketing scenarios. Google is making effort to reward with more exposure good quality and honest sites. Thus nowadays at least Google is making significant advances in protecting the profit potential of advertisers.


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