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Digital Marketing Minute: Bot Fraud Hampers Digital Advertising

Fraudulent web traffic is an increasingly common headache for digital marketers who work with advertising networks to deliver online ads.  A predominant source of fraudulent web traffic is software applications known as “bots,” which hijack consumers’ computers and redirect browsers to a website delivering online ads.  Bots can then automatically generate false ad views and false clicks, as well as automatically generate false user profiles or enter other information into a website’s form fields.  Despite prohibitions on bot-type activity in their terms of use, website operators have not been particularly successful in stopping bot fraud.  According to the Interactive Advertising Bureau, an estimated 36 percent of all web traffic is bot generated.

Many in the digital advertising industry are concerned about this trend, because advertisers often pay for digital advertising based on online ad views and clicks, and fraudulent views and clicks could be causing advertisers to waste significant amounts of money on ad campaigns.  Digital advertisers are also concerned that fraud skews ad campaign performance statistics, since distinguishing human activity from the bot generated activity is virtually impossible.  Unchecked, bot fraud could cause advertisers to lose confidence in the effectiveness of digital advertising ecosystem.

To help stem bot-related fraud, the Association of National Advertisers (ANA), an industry trade group, recently announced the launch of a joint study in conjunction with the online fraud detection firm White Ops to determine the level of bot fraud in the digital advertising industry. The ANA will publish a report with the results of the study and recommendations for action in mid-October 2014.

© 2020 McDermott Will & EmeryNational Law Review, Volume IV, Number 234

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Our e-Business Group is composed of lawyers in the Firm's various offices and departments around the world. The Group is led by a core team of full-time technology transaction and e-business lawyers with historic practices in this area. Given the international scope and broad range of legal issues involved in important technology transactions and online trade, McDermott Will & Emery's breadth ensures that clients have access to leading-edge advice in any of the areas pertinent to the actual or proposed transaction or activity.

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