Hass & Associates Online Reviews: Advertisers Join Forces to Fight Online Ad Fraud

As marketers grow increasingly concerned about the integrity of the online advertising inventory they are buying, a trade group and 30 well-known marketers are forming a coalition to address the problem.

The group, which is being led by the Association of National Advertisers, has hired ad fraud-detection firm WhiteOps to study and help stamp out so-called “bot fraud.”

Bots are computers hijacked by viruses that are programmed to visit sites and mimic human behavior, creating the illusion of authentic web traffic in order to lure in advertisers. Bot traffic costs advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages — regardless of whether the users are actual people.

The ANA said that some marketers estimate that about half the money they spend on digital advertising is wasted because of “bot fraud.” With digital ad spending around the globe expected to grow 17% this year to $140 billion, according to eMarketer, the stakes are high.

Ad executives blame the rise of fraudulent traffic on advertisers’ increased use of automated software to purchase ads via exchanges, ad networks and other middlemen. Such arrangements, they say, are far less transparent than buying ad space the traditional way by through human salesforces.

The ANA declined to reveal the names of the 30 advertisers participating in the anti-fraud group, but the trade organization’s members include blue-chip marketers such as Procter & Gamble, Johnson & Johnson and General Motors.

Starting next month, WhiteOps will track campaigns of the 30 companies for one month and report back the level of bot fraud occurring across the digital advertising industry, including display, video, mobile and social ads. The ad fraud-detection firm will also give advertisers lists of the sites and exchanges that have fraudulent traffic.

Other marketers will be able to use the study as a benchmark to compare their own data on ad fraud with the industry as a whole.

Fears are mounting that marketers will pull back on some online ad spending because of rampant fraud. In response, some publishers and ad companies are trying to address the problem themselves.

Google, for example, acquired Spider.io, a London-based company that specializes in identifying and blocking online-traffic fraud in February. Meanwhile, ad-buying giant GroupM said recently that it would stop buying online ads from “open” ad exchanges entirely by the end of the year, because it is concerned about the quality of ad inventory that’s available in these marketplaces and their lack of transparency.

Open exchanges are automated marketplaces through which advertisers buy and sell ads from across the web. Private exchanges, on the other hand, allow marketers to link directly to publishers and media companies.

But advertisers “cannot delegate this to be solved by agencies and publishers, they need to be involved,” said Bill Duggan, an executive vice present at the ANA. “Advertisers have the most to lose with bot fraud.”

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