For upon |Bot fraud is on the rise. Digital advertisers will lose an estimated $19 bn as a result of fraud in 2018. Brands are already suffering thanks to fraud restricting the transparency that is normally provided by analytics, and as a result are reassessing their approach to online advertising.
The sophistication and complexity of tracking these bots makes analysing the effectiveness of online advertising almost impossible. For example, Google removed 3.2bn ‘bad ads’ in 2017, up from 1.7bn the previous year, in an effort to prevent its immense advertising network from users having a bad experience. This shows how real the threat of bots is, and its impact shouldn’t be underestimated.
Mass amounts of bots exist, and the figure is constantly multiplying. Whilst continually viewing and clicking on ads, they create huge volumes of fake traffic. At the same time, they also camouflage themselves in order to charge advertisers through hidden costs. Originally targeting display ads found on computers, they have now evolved to become more sophisticated, and are able to infect both mobile devices and apps.
Bot fraud, so what?
So, what are the implications of all this? Ultimately there are two sides feeling the burn – businesses and the consumer.
Huge amount of profit is being lost by businesses. This fraud has an impact on both UK and global productivity. At a company level, it affects organisations ability to spend money elsewhere, for example, in training, hiring new talent, executing product innovation and future research and development. Margins are critical in enabling company growth, so you can reinvest in your product and your people. Due to this fraud, margins are taking a hit, affecting the future of brands. Bot fraud has created a fog for businesses, slowing down and in some cases preventing progress.
These consequences are also affecting the consumer, with a painfully impaired used experience full of friction points, from slow page loading speeds to actually being blocked from seeing the content they wanted.
How widespread is awareness around bot fraud?
Individuals have little awareness of this fraud – people often don’t realise there’s opportunity for a devious, entrepreneurial mind to work out how to monetise poor advertising. Likewise, the majority of business owners and those working in marketing are seemingly unaware of bot fraud or are not paying attention to the issue.
This is down to the fact that the information these organisations receive is from their partners, specifically media buyers. It’s not in the partners interest to explain that the media being bought: is going to have little effects for brands, isn’t what the consumer wants and will consequence in diminishing ROI over time.
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But some companies are aware and powerful enough to start pushing back, for example Unilever and P&G. Marc Pritchard, chief marketing officer at P&G, is putting pressure on the industry to provide clarity and to reduce costs, specifically in reaction to this increasing reduction in ROI and the fraudulent activity within display advertising and bot fraud.
Influence of other creative technologies
One-to-one or direct-to-consumer is quickly becoming one of the most exciting areas of technology. It’s a real pivot away from conventional push advertising and a growing area to help brands get past the wasted money being spent on fraudulent display advertising.
Many brands are already trying to move towards direct-to-consumer advertising, for example Nike’s global policy – Nike Direct – helps form a closer relationship with customers without any lack of transparency. The Nike Sneakers app allows consumers to explore, buy and share the best of Nike sneakers, it carries all the way from how they first inform people of products, through to having a direct sales channel and not relying on retailers as much to distribute. It’s about having a direct point of contact with the customer.
With the growth of Alexa, Google Home and the Google Assistant, brands can now plug in as a 3rd party to the assistant and offer utilities and services. For example, our work with Nike helps non-runners become runners and similarly, our work with Estée helps women improve their skin care routine. Both are made using elements of AI and machine learning which act as 3rd party utilities in this space. These assistants benefit brands, as through increasingly using technology in a creative way they are able to reach consumers via more channels than before.
Leading the way to combat ‘bad ads’
A range of global technology brands are already striving towards providing a better experience for users, through new alternatives. For example, Google provide ad blockers within its chrome web browsing experience, even though advertising is where they make money. Google, alongside the likes of Samsung and Apple, instead prioritise user experience over revenue as they are aware of the long-term opportunity for their business and want users to enjoy the platform, without a bad advertising experience. This is achieved through making clever decisions and always prioritising the user over any short-term financial gain.
Brands like Google are investing in joint investigations with partners like The Guardian. Together they initiated a series of tests to investigate issues of programmatic ad fraud on the open exchange and the effectiveness of ads.txt. Helping to shine a light on what is happening and providing insight as to how to avoid it. The results showed how unacceptable it was to see nearly 72% of video spend going to unauthorized exchanges and SSPs.
What does the future look like?
The future, despite the challenges, does look bright. It’s likely we’ll see a decline in display advertising as its fraudulent activity becomes more obvious to businesses, shareholders and consumers. Through becoming more aware of this negative activity, shareholders can place pressure on businesses to challenge their media partners further and say goodbye to fraudulent behaviour.
Eventually, the long-term opportunity is for brands to have a direct conversation with consumers and to control their relationship throughout. Avoiding the invasion of fraudulent bots and relying on the media buyers, inefficient analytics of display advertising, to get the information around what users want.
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