Piper Jaffray Report: Understanding And Sizing The Bot Problem in Online Advertising

Many advertisers are moving budgets online with the goal of making large, highly-automated ad buys at scale. However, one of the major hurdles is understanding the risks and finding ways to overcome them, specifically around bot fraud. Publications such as the WSJ, NYTimes, and Adweek have helped raise awareness around bot fraud and its economic impact, but the challenges remain.
 
In July of 2014, Gene Munster and Douglas Clinton of Piper Jaffray & Co. published a report on understanding the challenges and scope of the bot problem in online advertising. Please read below.
 

Piper Jaffray Report: Understanding And Sizing The Bot Problem in Online Advertising from Solve Media


Fraudulent Web Traffic Continues to Dominate Globally, Big Budget Advertisers Beginning To Demand Change

Global suspicious traffic remains major challenge despite media attention

New York City – June 19, 2014 – Today, Solve Media released the results of its Quarterly Bot Traffic Market Advisory. Since the release of the company’s first report in September 2012, the bot fraud issue has gained significant industry attention. Recent headlines from major publications including The Wall Street Journal, Adweek and The Guardian serve to raise awareness, but large-scale action against global suspicious traffic lags.

Solve Media’s Quarterly Bot Traffic Market Advisory for Q1 revealed that global suspicious web traffic remained at 54% for the second consecutive quarter. Global bot traffic reached 32%. Suspicious US web traffic continues to make up the majority of total traffic at 55%, down slightly from last quarter due to lower ad spend after the holiday surge.

Solve Media took an in-depth look at the automotive vertical during Q1 2014. This research uncovered that 36.1% of traffic on automotive-specific sites acted suspiciously, with 22.2% of traffic confirmed as bot. As multi-screen touch points become an integral part of the car buying process, automotive advertisers are moving more of their budgets to online and mobile channels. This shift creates significant demand for premium inventory, and has invited fraud. Large automotive advertisers with significant ad budgets must use their influence to demand accountability and the proactive mitigation of bot fraud. For both efficiency and ROI, automotive advertisers should seek out high-performance advertising solutions that reach validated human audiences.

Q1 Auto Bot Traffic

“The bot problem is not going to improve unless the companies with clout use it to demand an engaged human audience. Bigger budgets mean more power and influence, which puts automotive advertisers in the proverbial driver’s seat for demanding accountability in our industry,” said Ari Jacoby, CEO and Co-Founder, Solve Media. “If they refuse to settle for anything less than zero-waste ad spend investments, the industry will have no choice but to meet the demand. With the push for Secure Media from the biggest investors in digital advertising, providers on the sell-side must be prepared with effective solutions like performance-based media that guarantee cognition.”

Solve Media’s publisher platform includes thousands of automotive sites. It has reported on bot data for the past two years based on insights from the 10,000 publishers in its network across display, video and mobile.

About Solve Media
Solve Media was founded by veteran entrepreneurs and technologists focused on innovative Internet advertising, data and security solutions. The company’s proprietary online and mobile advertising platform, the TYPE-IN, was designed to create highly effective opportunities for brands to engage with real consumers. With this platform, Solve Media guarantees brand message delivery, brand lift and return on investment for advertisers. Additionally, the platform creates new revenue opportunities for publishers and saves time for consumers.

Solve Media is based in New York City and Philadelphia, with offices across North America and Europe. Learn more at: http://solvemedia.com/


Rapid Shift of Automotive Advertising Dollars to Digital Increases Demand for Zero-Waste Advertising Investments

Solve Media study shows bots make up 22% of traffic on automotive sites

New York City – June 19, 2014 – Solve Media today released the results of its Quarterly Bot Traffic Market Advisory. While global threats continued to grow in Q1 2014, an in-depth look at automotive-related sites uncovered that 36% of traffic on these sites acted suspiciously, with 22% of the traffic confirmed as bot. Mobile traffic to automotive sites showed signs of fraud as well, with 13% acting suspiciously and 6% confirmed as bots. As automotive advertising buyers shift their attention to digital channels, they have the opportunity to lead the industry by actively pursuing Secure Media opportunities where audience humanity can be verified.

Q1 Auto Bot Traffic

“The bot traffic plague is a major challenge in the automotive industry, but we are proactively addressing the issue in all of our digital marketing efforts,” said Keith Morris, SVP, Team Detroit. “We are seeing significant success with engagement and performance-based media like Solve Media that eliminate the noise and waste of non-viewable ads and bot fraud.”

Consumer buying habits are changing as car buyers turn to mobile devices and online sources to research potential purchases. Data released from Google in early 2013 indicated that 80% of car buyers spend an average of 18 hours online researching models and prices before purchasing. A study by Placed revealed that 71% of consumers use a smartphone during the car buying process, including 63% who use their smartphones while at a dealership.

In response to this shift in consumer buying behavior, the automotive industry is moving more of its advertising budget to digital. According to eMarketer, the automotive industry is projected to be second only to retail in digital ad spending by 2015, putting it in a position of power to mobilize the advertising industry against bot fraud.

“The bot problem is not going to improve unless the companies with clout use it to demand an engaged human audience. Bigger budgets mean more power and influence, which puts automotive advertisers in the proverbial driver’s seat to demand accountability in our industry,” said Ari Jacoby, CEO and Co-Founder, Solve Media. “If they refuse to settle for anything less than zero-waste ad spend investments, the industry will have no choice but to meet the demand. With the push for Secure Media from the biggest investors in digital advertising, providers on the sell-side must be prepared with effective solutions like performance-based media that guarantee cognition.”

Solve Media’s publisher platform includes thousands of automotive sites. It has reported on bot data for the past two years based on insights from the 10,000 publishers in its network across display, video and mobile.

For more information on bots and their classifications, view the infographic here.

About Solve Media

Solve Media was founded by veteran entrepreneurs and technologists focused on innovative Internet advertising, data and security solutions. The company’s proprietary online and mobile advertising platform, the TYPE-IN, was designed to create highly effective opportunities for brands to engage with real consumers. With this platform, Solve Media guarantees brand message delivery, brand lift and return on investment for advertisers. Additionally, the platform creates new revenue opportunities for publishers and saves time for consumers.

Solve Media is based in New York City and Philadelphia, with offices across North America and Europe. Learn more at: http://solvemedia.com/