A 'zombie army' of bots is going to steal $7.2 billion from the advertising industry this year

Dollars Flying Volatility

REUTERS/Marcelo Del Pozo

Last year it was estimated that advertisers lost $5 billion to fraud

Online ad fraud will cost advertisers $7.2 billion globally this year, according to ad security company White Ops.

Botnets - also know as a "zombie army" - are computers that have been infected with malware that generates tons of fake clicks on advertisements. The controllers of theses Botnets sell the fake traffic to unethical web publishers who want to inflate the number of people clicking on the ads they run on their sites. Advertisers are then fooled into buying ad spots from publishers, even though very few humans actually click on the ads on their pages.

White Ops conducted a study using 49 advertisers that were given detection tags to measure the amount of non-human traffic on their advertising. The average cost to the advertisers in the study was $10 million. It ranged between $250,000 and $42 million. We first spotted the study on The Register.

The brands used in the study included McDonald's, PlayStation, Ford, HP, Walmart, and MasterCard. A quarter of these advertisers found that at least 9% of their traffic was fake. The study did not specify how much each individual company lost to the ad fraud.

White Ops came up with the $7.2 billion figure for the total cost to advertisers from a calculation that assumed the rate of fraud will remain the same this year and estimated that global digital advertising will go up by 15%.

The study also found that most of the media bought by a typical advertiser is clean, but "when fraud does affect an advertiser, it tends to hit hard and in very concentrated areas."

Dan Kaminsky, co-founder of White Ops, said in the report: "Advertising fraud has the curious status of almost seeming legitimate - you couldn't expect to get away with raiding a bank account or accessing someone else's Gmail account, but defrauding advertisers, even by using the host user's identifying cookies, doesn't seem nearly as criminal."

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