December 10, 2014 Last Updated 8:55 am

White Ops claims advertisers losing billions due to fake traffic

Morning Brief: Reaction to survey, though, ignores the low CPMs being paid for web traffic; The Economist updates its iPad app, introducing design tweaks, bug fixes

The latest advertising meme is that billions of marketing dollars are going to waste due to bogus web traffic. According to a study by the Association of National Advertisers and the ad fraud detection firm White Ops Inc., 11 percent of traffic purchased may be fraudulent, actually traffic generated by bots (a software application that runs automated, repetitive tasks such as pinging websites).

The Wall Street Journal, which ran a story on the study yesterday, said that the study said that 23 percent of the traffic for video ads was also wasted on fraudulent traffic.

bot-typing“Advertisers could lose more than $6 billion globally to ad fraud in 2015, White Ops estimated, reaching that number by applying the fraud levels observed in the U.S. to the $48.3 billion PricewaterhouseCoopers estimates will be spent on display and video ads world-wide next year.”

Some have even suggested that advertisers should get angry about the amount of fraudulent traffic, saying that “digital marketers are getting mugged.”

But, it should be pointed out, they are also getting a good deal. If so much of the traffic being reported were actually legit – and one must admit that it would be nice if it were – then CPMs would have to rise. Instead, marketers are paying rock bottom prices for digital advertising, and some ad buying agencies want to see the price for legitimate, audited readers go down, as well.

Bogus web traffic is a problem, but so is the rush to drive digital ad prices down. Fixing one problem without the other might save some ad dollars in the short term, but it may also result in higher prices for marketers in the long run. That might actually be a very good thing for everyone except those agencies that don’t like doing the work necessary to insure their clients are getting what they pay for.

TheEcon-loginThe Economist today updated its iPad app, The Economist for iPad, introducing a slightly new look and feel for the app, though not fundamentally changing it.

The update also fixes such app bugs.

The Economist continues to do things a bit differently in that their last publisher’s statement shows only around 7,300 digital replica copies, while at the same time reporting over 80,000 digital non-replica subscribers. This is due to the fact that they are selling advertising for their digital editions (a good thing) and creating new content for their digital editions (also a good thing). But AAM regulations, being what they are, these readers don’t show up where many might expect them (though this could change at some time in the future.

The latest Rapid Report shows print subscriptions down a bit with the October issues, but readership still well above their ratebase of 750,000.

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