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Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

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Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#11

Post by murbard2 »

Many people are asking why it's a problem, why don't advertisers just pay less, etc.

The adbots are making money off of this, otherwise they wouldn't do it, and that money has to come from somewhere. Meanwhile, they don't contribute anything of value, so someone's losing money to the adbots.

The burden of the loss will actually be distributed between the ad buyers and ad space sellers depending on their elasticity. The economics is very similar to that of a sales tax, with the proceed going to the botnets.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#12

Post by Bill_Dimm »

murbard2 wrote: post #11

Many people are asking why it's a problem, why don't advertisers just pay less, etc. The adbots are making money off of this, otherwise they wouldn't do it, and that money has to come from somewhere . Meanwhile, they don't contribute anything of value, so someone 's losing money to the adbots. The burden of the loss will actually be distributed between the ad buyers and ad space sellers depending on their elasticity.…

I think a clearer way to put it is this: The 23% number was measured across networks displaying ads on many sites. Some of those sites employ botnets to generate fake views, giving them much more than 23% fraudulent views, while other sites that don't do such things have 0% fraudulent views. The amount the advertiser is willing to pay is presumably set by their experience across the whole network, so if they were willing to pay $X per ad without fraud, they will pay 0.77 * $X due to fraud, which means that the honest websites get less than they deserve (based on the value they deliver) while the fraudulent websites get more than they deserve. So, the fraudulent websites are stealing from the honest ones, not stealing from the advertisers.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#13

Post by murbard2 »

Bill_Dimm wrote: post #12
murbard2 wrote: post #11

Many people are asking why it's a problem, why don't advertisers just pay less, etc. The adbots are making money off of this, otherwise they wouldn't do it, and that money has to come from somewhere . Meanwhile, they don't contribute anything of value, so someone 's losing money to the adbots. The burden of the loss will actually be distributed between the ad buyers and ad space sellers depending on their elasticity.…

I think a clearer way to put it is this: The 23% number was measured across networks displaying ads on many sites. Some of those sites employ botnets to generate fake views, giving them much more than 23% fraudulent views, while other sites that don't do such things have 0% fraudulent views. The amount the advertiser is willing to pay is presumably set by their experience across the whole network, so if they were wil…

Not knowing the rate of ad fraud does make things worse, but is not necessary to explain why it's a problem. Even if the ad fraud rate was absolutely uniform across all websites, there would be a deadweight loss. The ad fraudsters are extracting money from someone.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#15

Post by true_religion »

jonahx wrote: post #14

I'm confused about the motivation here. Are the companies serving these ads running the bots, or paying others surreptitiously to run them? Why not just directly fake numbers if you're going to cheat customers? I feel I must be missing something...

There's two reasons that spring to mind:

1. The companies faking adviews don't directly control the ad management system, so they need to fake a page view on their servers in order to get the 3rd party ad manager (e.g. Doubleclick/Adsense) to record it.

2. The most obvious way of detecting fake traffic is to see that your ad click-through numbers don't match up with the actual traffic hitting your server. So to obfuscate this, you'll have your bot click through the advert then land on the advertisers page and spider through a few links before bouncing.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#16

Post by true_religion »

murbard2 wrote: post #13
Bill_Dimm wrote: post #12

Earlier quoted context omitted.

I think a clearer way to put it is this: The 23% number was measured across networks displaying ads on many sites. Some of those sites employ botnets to generate fake views, giving them much more than 23% fraudulent views, while other sites that don't do such things have 0% fraudulent views. The amount the advertiser is willing to pay is presumably set by their experience across the whole network, so if they were wil…

Not knowing the rate of ad fraud does make things worse, but is not necessary to explain why it's a problem. Even if the ad fraud rate was absolutely uniform across all websites, there would be a deadweight loss. The ad fraudsters are extracting money from someone.

If the ad fraud rate were uniform across all websites, then advertisers would simply pay less CPM because its less converting traffic.

If website A is all fraud, and website B is 0% fraud. Then on the same network, you'd have a 50% fraud rate, and website A would be paid money it doesn't deserve (as it deserves nothing for its 100% fraud traffic).

Fraudsters are being subsidized by legitimate traffic.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#17

Post by unreal37 »

jnty wrote: post #3

Not sure I fully buy the argument that the industry is actually genuinely losing that $6bn. If I buy plates in bulk but find that 25% are usually broken in shipping, I will tend to pay 25% less for each shipment on the assumption that this will happen - the supplier might even have already priced this in. Online advertising is a much more fluid market and very metrics-focused - I find it hard to believe that most sma…

I think you're right. It's not "the end of digital advertising". It's just another factor among many that lead to lower PPC prices.

When GM left Facebook because they claimed Facebook ads don't work, it was a huge story. But when GM returned to Facebook less than a year later, that didn't get as much publicity.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#19

Post by unreal37 »

illumen wrote: post #6
akrymski wrote: post #5

Someone please explain why this is a problem. The way I see it is that advertisers pay for results. If you spend $100,000 on ads and make less than $100,000 in extra profit - you're paying too much for ads. The fact that 23% of ad views don't convert just pushes down the price of an "ad view", ie those fake views are priced in to your CPM rates already. This does not effect your ad budget however. People that get hur…

Most advert buyers are not sophisticated. So fraud matters.

I don't believe that. I've worked with some companies that spend millions per year with online ads. They are sophisticated.

Re: Robots, Not Humans, Fake 23% of Web Video Ad Views, Study Finds

#20

Post by unreal37 »

murbard2 wrote: post #13
Bill_Dimm wrote: post #12

Earlier quoted context omitted.

I think a clearer way to put it is this: The 23% number was measured across networks displaying ads on many sites. Some of those sites employ botnets to generate fake views, giving them much more than 23% fraudulent views, while other sites that don't do such things have 0% fraudulent views. The amount the advertiser is willing to pay is presumably set by their experience across the whole network, so if they were wil…

Not knowing the rate of ad fraud does make things worse, but is not necessary to explain why it's a problem. Even if the ad fraud rate was absolutely uniform across all websites, there would be a deadweight loss. The ad fraudsters are extracting money from someone.

The money comes out of the pockets of publishers. Collectively, they are making less than they should be for a pageview or a click. The advertisers have a budget for ads, and they will only pay that. At some point, when the ad is not effective and profitable, they will redirect that same ad money somewhere else. It's the Internet publishers that are losing.
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