Many forms of online advertising are vulnerable to ad fraud, including PPC banner advertising. According to a recent report from the Australian website AdNews.com, advertisers lose $116 million per year thanks to ad fraud bots. The data comes from a Datalicious survey, which found that “fraudulent website visitors” (aka ad fraud bots) suck up $68 million worth of marketing budgets, while another $48 million goes down the drain due to “fraudulent ad impressions.”

 

Two Types of Ad Fraud

Ad Fraud Bots Cost Australian Businesses Over $116 MillionThese two types of ad fraud—fraudulent visitors and false impressions—might sound similar on paper. However, they are distinctly different forms of fraudulent online activity. Fraudulent website visitors are ad fraud bots, which provide sites real hits from automated robots. As they are not genuine people they provide no value at all. Fraudulent impressions, meanwhile, are impressions that never happened. Fabrications that occur due to “ad stacking or pixel stuffing”.  To read more about how ad fraud is impacting the marketing industry, see

Fraudulent impressions, meanwhile, are impressions that never happened in the first place. Fabrications that occur due to “ad stacking or pixel stuffing”.  To read more about how ad fraud is impacting the marketing industry, see here.

The good news is that even at $116 million, ad fraud still only accounts for a small percentage of Australia’s overall advertising market.   According to the Sydney Morning Herald, Australia’s national ad spending will hit $13.5 billion in 2016. If you do that math, it means that ad fraud in Australia affects less than 1% of marketing budgets in Australia. The bad news is that $116 million is still an enormous amount of theft, regardless of the percentage. Ad fraud bots and ad-stacking don’t discriminate based on country.  In the report by Ad Age, the global cost of the problem in 2016 was predicted to be $7.2 billion.

 

Guarding Against Ad Fraud Bots

These figures are not good advocates of the power of traditional online advertising. While banner ads and pay-per-click (PPC) can help a business raise its online profile and reach potential customers, they may also end up wasted on ad fraud bots at a higher-than-expected level. (The Datalicious survey also notes that 4.4% of display traffic is “suspected to be bots.”) Beyond bots, many users will likely never see your banner ads, thanks to the widespread use of ad blockers. By diversifying your marketing budget to include other types of online marketing—namely influencer marketing – you can minimise the impact of advertising fraud while also engaging with potential customers on a more direct, personal level.

 

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