Bots are the scourge of the digital advertising ecosystem says Peter Smyth who offers some suggestions about how the industry can tackle to problem head-on.
Bots. They’re the big issue that’s been affecting the advertising industry for a while now but the significance of their corrosive impact seems to have faded from view. Rightly or wrongly, it sometimes seems like their effect is “baked into” how the market works. And in my opinion that’s a big mistake. Why?
Because they’re too important to ignore. Ad. fraud as a result of bots costs in the billions of euro / dollars annually. It’s the significant challenges and risks that they pose which concerns me most – not only to advertisers but to all of us in the creative and media/ digital advertising ecosystem.
Financial outcomes, data integrity, brand reputation, and overall market dynamics are at risk. The good news is that advertisers can take proactive steps to mitigate the detrimental impact of bot activity. By investing in advanced technologies, maintaining vigilant monitoring practices, partnering with reputable networks, and fostering industry collaboration, advertisers can protect their campaigns.
However, understanding the bot impact is crucial for advertisers who must adopt effective strategies to target these risks and ensure their campaigns reach genuine audiences. Let me lay out the argument.
Financial Implications
Advertisers pay for ad impressions and clicks under the assumption that they are engaging with potential customers.
However, bots can generate a large volume of fraudulent impressions and clicks, leading to wasted ad spend – reducing the return on investment (ROI) for advertising campaigns.
Data Integrity Issues
Accurate data is essential for marketers to analyse campaign performance, understand audience behaviour, and make informed decisions. However, bots also compromise the integrity of data collected from advertising campaigns, skewing metrics such as click-through rates (CTR), conversion rates, and overall engagement.
This distortion makes it difficult to gauge the true effectiveness of an ad campaign and to identify which strategies are working. As a result, inaccurate data can lead to misguided decisions, resulting in further financial loss and missed opportunities for genuine audience engagement.
Brand Reputation Risks
The presence of bots can also harm a brand’s reputation. eroding trust among consumers, partners, and stakeholders. Additionally, if bots are used to disseminate malware or engage in phishing attacks through compromised ad networks, the affected brand could be associated with these negative activities – not a good look for anyone.
Market Distortion
By creating artificial demand and supply, bots inflate the cost of ad placements. Advertisers end up paying more for ad space than its true market value, driven by the false impression of high demand. This artificial inflation disrupts fair competition, disadvantaging smaller advertisers who may not have the resources to compete with inflated prices. As a result, the overall efficiency of the market is reduced, and the playing field is made
Security Risks. Beyond financial and reputational damage, bots pose significant security risks. They can be used as vectors for cyberattacks, delivering malware or conducting phishing schemes through ad networks. These malicious activities can compromise user data, leading to potential legal repercussions and further erosion of consumer trust. Ensuring strong cybersecurity is therefore a critical aspect of mitigating the negative impacts of bots in advertising.
So what can be done?
Digital advertising is a key part of the media mix for many but it does come with a certain level of risk attached. So, to reduce this, my advice is that advertisers should invest in advanced bot detection and prevention technologies as a priority.
Closer to home, educating marketing and advertising teams about the risks posed by bots and the importance of data integrity can foster a culture of vigilance. Training staff to recognize signs of bot activity and understand the tools available for mitigation is essential for maintaining the effectiveness of ad campaigns.
Insisting on transparency from ad networks and third-party vendors regarding traffic sources and performance metrics can help advertisers better understand the quality of their ad placements. Detailed reporting allows for greater accountability, facilitates the detection of fraudulent activities and ensure clients receive value for money across both traditional and digital media
Ensuring the integrity and effectiveness of digital advertising while optimising your media mix across both digital and traditional platforms not only safeguards financial investments but also preserves brand reputation and market dynamics. Surely we all want that?
Peter Smyth is CEO of IRS+
