Growth in Automated Online Ad Selling Increases Phony Traffic Counts

When any new technology or system is developed, it seems that malcontents and criminals start looking for a way to create havoc or profit from weaknesses they can exploit. Malware and viruses continue to be a problem for consumers and businesses who use frauddesktop computers. And, now that media companies are beginning to make money from online advertising, fraudulent traffic counts are a growing problem. A recent Wall Street Journal article described just how significant this problem has become.

Non-​consumer traffic is estimated to make up 51% of total online activity. Not all of this is malicious, however, but false traffic numbers can range up to 10% for well-​known sites. However, sites that are not as well-​known may have bot-​traffic problems of as high as 25% of total visits. If the numbers being reported are overstated, marketers are going to demand more accountability.

The problem is growing as more websites rely online advertising for revenue. Unscrupulous operators can easily hire a botnet service  — which essentially hijacks computers to visit sites, all being done in the background on unwitting owners. In cases like this, advertising is seen by fewer people than claimed but the marketing is paying big money. Tamer Hassan, a co-​founder and chief technology officer of White Ops, a company that helps marketers detect fraud, says the industry is very lucrative. “It’s drug-​level money, but you don’t have to kill anyone.” Some estimates range as high as $10 billion in terms of cost to marketers for ads that are never seen by consumers.

Analysts warn that the growing practice of automated media sales results in less checking on site credibility. The industry is also using more middlemen to sell ad packages and their pay is based on traffic. The system therefore rewards these sellers when they can increase traffic. Not surprisingly, several new businesses are helping online advertisers with this problem. White Ops is one such company and Mdotlabs is another.

As advertisers continue to move marketing dollars online, it’s likely they’ll want to know that their media partners are trying to detect and shut down fraudulent operators.

[Sources: Knight, Kristina. Platform to ID Phony Traffic. Bizreport​.com. 12 Aug. 2013. Web. 17 Oct. 2013; Stewart and Vranica. Phony Web Traffic. Online​.wsj​.com. 30 Sep. 2013. Web. 17 Oct. 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.