The Ad Contrarian: Fake traffic could cost advertisers $9.5 billion this year

by Bob Hoffman (@adcontrarian) On 17 June, we published a piece called The $7.5 Billion Ad Swindle. It was about the massive fraud that is being perpetrated on advertisers by criminality within the online advertising industry.

A new report by Solve Media indicates that the fraud is growing at an alarming rate. According to an Adweek piece last week, in just 3 months the size of the fraud has jumped to about $9.5 billion this year (by the way, kudos to Mike Shields of Adweek who won’t let this story go away.)

In the first quarter of 2013, Solve reports that the amount of suspicious web advertising traffic has risen from 43% to 46%. That means that 46% of the viewership reported by websites seems to be fraudulent. It is not people. It is computer programs (bots) pretending to be people to drive up the numbers and screw advertisers out of billions of dollars.

Online Advertisers Getting Hosed

by Bob Hoffman (@adcontrarian), San Francisco Bay Here at Ad Contrarian Worldwide Headquarters, one of our axioms is that there is no bigger sucker than a gullible marketer convinced he’s missing a trend.

We’re starting to think that the same can be said of the entire advertising industry.

Our industry has been desperately trying to convince itself that the web is a fabulous advertising medium. We share each others’ anecdotes about the handful of meager successes (amid the thousands of failures.) We go to conferences and listen to case histories that are two standard deviations from normal and try to convince ourselves that they are typical.

But we can’t erase the facts. And the facts are dismaying.

Click-through rates are abysmal. The odds of breaking through on YouTube are in the million-to-one range. Facebook is a big fat turd that seems to have a new ad scheme every week. QR codes are a cruel joke. Content and social media are sounding more like religion, and less like business.

And now we’re starting to get a peek at massive advertising frauds being perpetrated on the web.

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