Report: Online Ads Waste $9.5B in 2013

Online advertising firms will waste $9.5 billion this year advertising to bots guaranteed to buy nothing, according to numbers from Solve Media.

It may not come as a surprise that online advertising firms waste billions of dollars each year, but a new report claims that – even if you were to assume that the entire practice of targeting users with online ads is an effective and lucrative one – $9.5 billion this year will be wasted advertising to bots that are guaranteed to buy nothing.

According to Solve Media, an agency with expertise in the interplay between online advertising and Internet security, said that suspicious and potentially malicious traffic may account for as much as 46 percent of Web-based advertisement impressions and 35 percent of mobile-based ads in 2013, up from 43 and 22 percent respectively in the previous year. At the very least, the company claims that in the second quarter of this year, bots were responsible for interacting with between 24 percent and 29 percent of Web ads and between 11 percent and 14 percent of mobile ads.

“Analysis has shown that bot traffic affecting the online advertising ecosystem has grown from 10% to at least 24% in less than a year,” said Adam J. O’Donnell, Solve Media security council member and chief architect of the cloud technology group at Sourcefire.

Based on current levels of bot traffic and market values for online advertising space, Solve Media estimates that marketing firms will waste $9.5 billion this year catering ads toward bots that return no value on investments in that space.

Solve Media CEO Ari Jacoby and spokesperson Jonathan Kriner explained in an email interview that the company monitors two types of malicious activity: suspicious traffic accounts, traffic that is considered aberrant but can not be confirmed as bot traffic; and bot traffic, which is included in suspicious traffic figures, and accounts for known bot traffic.

China, Venezuala, and Ukraine generated the highest levels of suspicious traffic for Web ads, while Singapore, Macau, and Qatar were responsible for the largest amount of suspicious mobile-ad traffic. Solve Media’s report indicates that in the United States, Web-based ad traffic was 44 percent suspicious and mobile ad traffic was 22 percent suspicious in the second quarter.

Jacoby explained in an interview with Threatpost that most firms pay for advertisements on a cost per 1,000 impressions basis. They are obviously paying with the intent of reaching a human audience. However, they inevitably end up paying for automated traffic that brings no return on their investments as well. In the worst case scenarios, Jocoby claimed, certain sites are marred with such excessive bot traffic that firms pay for advertisements there that reach literally no human audience whatsoever.

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