America's retailers are pouring billions into digital advertising this year as e-commerce grows and sets the tone of a highly competitive holiday shopping season. But a big chunk of their resources may be wasted on scams.
About 34% of U.S. web traffic on retail sites in the third quarter was determined to be from bots, while 55% was deemed suspicious, Solve Media said in a release yesterday. That bodes poorly for the fourth quarter, which accounts for a major part of the industry's estimated $11 billion in digital ad spending this year, as per eMarketer projections.
Fraudsters create bot traffic to fool marketers into paying more for internet ads. Payments are typically made when an ad loads; the advertiser will end up paying for that even if a real person hasn't visited the site.
The Wall Street Journal reported on the phenomenon in March, writing: "The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers." The identity of people profiting from this behavior is unclear, the newspaper wrote.
Retailers this holiday season "need to be the most proactive in protecting their budgets," Solve Media said. That could mean anything from hiring firms to audit online traffic to rewording media contracts to cutting deals that require payment only once users engage with an ad.
Retailers may be showing ads like this to bots, rather than this reporter.