KEY POINTS

  • Internet bots — or computer software that fraudulently increases website traffic to siphon ad revenue — are having a huge financial impact on the advertising industry. In 2016, advertisers could spend $7.2 billion on ads that are never actually seen, up from $6.3 billion in 2015, according to a report. 
  • Bots are developed by cyber criminals. Though these criminals can employ bots in a number of ways, one of the most typical methods is setting up fake websites populated with infringed content. When a visitor comes to the website, their device is infected with malware that drives bot traffic.
  • Botnets are still primarily a desktop problem, but that is expected to change in the coming years. Bot traffic is not as common on mobile devices, both because detection firms have yet to make the technology to account for bot traffic and because bot operators have less revenue to gain from targeting mobile. But bots are expected to follow ad spend and eventually become more prevalent on mobile. 
  • Impression-based campaigns see a greater share of bot traffic than performance-based campaigns, while more expensive ad formats tend to be hit harder than less expensive inventory. Bot operators try to gain as much revenue as possible through their fraud activities and thus typically target more expensive ads. 
  • Bots target video and display ads through the same entry points. But long-term effects on video inventory could be greater, with a significant potential impact on video ad pricing.
  • Both the sell-side and buy-side are responsible for mitigating the effects of bot traffic. 
    • Publishers are responsible for knowing where they are sourcing their traffic from so as not to sell adverts that have a chance of being seen by a nonhuman user. Ad platforms and exchanges should attempt to eliminate ad fraud from their supply by removing publishers sourcing high levels of bot traffic.
    • Buyers need to reevaluate their buying practices and — if possible — place a greater emphasis on inventory quality rather than efficiency and cheapness. 
  • Industry bodies are beginning to address bot-driven ad fraud. The Media Rating Council (MRC) announced a new set of standards surrounding the measurement and removal of invalid traffic in October 2015. 
  • AppNexus, one of the largest programmatic supply side ad tech platforms (SSP), undertook an initiative in 2015 to clear its platform of ad fraud driven by bot [...]