Fraud, Bots, and Wasted Money: Behind the Smoke and Mirrors of Online Advertising

by Matt Klassen on July 7, 2015

One’s return for investment in advertising has always been difficult to measure, particularly in the days where print advertising was the only option. As department store magnate John Wanamaker famously once said: “I know half the money I spend on advertising is wasted, I just don’t know which half.” He was referring, of course, to the difficulty in calculating the actual impact advertising had on his business, something that the digitization of advertising was purportedly supposed to solve.

In fact, the emergence of online advertising did give advertisers a greater ability to see the effectiveness of their advertising dollars, as advanced analytics started to give real-time information about ‘clicks’ on any given ad impression. It made it easier to see how one’s advertising dollars were spent…or so many thought.

But where such tools were touted as getting more eyeballs on advertising–that is, making one’s advertising dollars most effectively spent–it has become clear that, in effect, the opposite is true, for while analytical tools can tell advertisers how many ‘clicks’ their ads got, in an advertising market rife with fraud, the simple fact is one can never be sure if an actual human has seen those advertisements at all.

According to Fortune writer Mathew Ingram, the entire world of online advertising is a complex world of smoke and mirrors, were would-be advertisers are sold on the promise of increased viewership in the form of “clicks,” when in fact much of the supposed interaction with advertising impressions may be fraudulent, generated by complex bot networks that interact with advertising much like a human user would.

In fact, according to some estimates, almost 60% of online activity is non-human, and subsequently, studies about ad campaigns in 2012 and 2013 found that 54 percent of ads were never shown to a human visitor, yet they were paid for and counted as “impressions” (that is, advertising that was actively ‘clicked’) in someone’s ad budget.

Simply put, “bots,” software programs designed to mimic the activities of human browsers, have the potential to drive significant amounts of traffic towards a given website, even goes as far as interacting with the website and clicking on links. This gives the impression to advertisers that their ads are effective, but in essence it is a shady way for ad publishers, companies who host ads, to generate income on fraudulent ad interactions.

In the end one can begin to see just how tricky the world of online advertising can be, particularly when such fraudulent bot-driven traffic is then bought and sold on the black market. Couple all this with the general dislike of online advertising anyway and, as Ingram writes, the entire market “is like a house of cards that is ready to topple—or a tiny child’s bicycle being ridden by dozens of clowns, all perched on each others’ shoulders. How long before it collapses completely?”

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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