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A Bot Saw Your Ad, But Can It Buy Your Product?

August 14, 2014

It is no surprise that digital ad revenue is growing at a faster rate than any other major advertising outlets. According to eMarketer, digital ad spending is expected to grow 17% this year to $140 billion globally.

Advertisers often tout the benefits of digital advertising. One of these benefits is the belief that digital advertising can be measured perfectly. Unlike radio and television, which need to estimate the number of impressions delivered, the digital world can (supposedly) tell you precisely how many times your ad was “viewed.”

There are two flaws with this claim. First, what the digital companies measure is the number of times an ad is served, and they assume a human has viewed the ad each of those time. New studies have documented that many of these exposures are not to humans, but bots.

Bots are computer systems that surf the web for the sole purpose of building ad impressions. Bots can view thousands of ads in a very short period of time. The advertiser is charged for these impressions, but they are never actually viewed by a human consumer. Obviously, the value of ads viewed by bots is zero.

The ANA (Association of National Advertisers) said that some marketers estimate that about half the money spent on digital advertising is wasted due to “bot fraud.”

Dr. Augustine Fou, Digital Consigliere at Marketing Science Consulting Group, Inc. estimates that 39% of all digital ads sold in the U.S. are consumed by bots. That comes out to $14 billion wasted each year. However, not all internet ads are equal when it comes to fraud. According to Dr. Fou:

  • 50% of all display ads are fraudulent
  • 60% of all video ads are fraudulent
  • 40% of all mobile ads are fraudulent
  • 30% of all search ads are fraudulent

Clearly digital advertisers are not reaching the consumers they think they are.

There’s another key issue here. Which is more important: a precise measurement tool, or an effective advertising vehicle? Placing your ad dollars in the digital sector purely because you can measure how many times the ad was served is worthless. The purpose of advertising is to move products and services. While Nielsen’s PPM and diary methods are not perfect measurement tools, it has been proven time and again that radio works for advertisers. The recent Nielsen study, “Nielsen Cracks the Code on Radio ROI,” highlights that for every dollar spent on radio advertising, the advertiser receives six dollars in incremental revenue. That revenue comes from humans, not bots!

Radio reaches human ears, and provides a proven return on investment. Isn’t that the real purpose of advertising?

-Charlie Sislen, Partner