Fraud in video advertising is a significant problem causing billions of dollars in losses throughout the industry. To help drive a common understanding and gain consensus around what should be done, last Thursday Videology and White Ops released a valuable new white paper, “Eradicating Bot Fraud: The Path to Zero Tolerance.”

The paper explains all the different causes of video ad fraud, focusing on bots, or non-human traffic, which are considered the most pervasive type of fraud. Bots distort the market because they trigger an ad view even though no human being ever actually saw the ad. Bots are active in all types of video, from long-tail to premium. Videology and White Ops found that a higher percentage of traffic at night contains bots and that users age 65+ are 69% more likely to be hosting bots through an outdated browser.

To help demonstrate the cost of bots on brand engagement, the companies ran a study of a campaign when White Ops’ bot-blocking was turned on and when it was turned off. The campaign asked for multiple choice responses to determine brand engagement. The study found a 22% higher rate of brand engagement with bot-blocking turned on, while the cost for doing so only increased the campaign’s price by 2%. The paper also introduces the idea of a “Human CPM,” which is the true cost of a view actually seen by a human. Since the study found that campaigns not including bot-blocking technology had a 10.1% level of bots, the actual CPM of a campaign would rise by that level (e.g. a $10 CPM would have an $11.12 human CPM). 

The paper recommends that the industry must develop one common standards for viewability and bot monitoring. In addition, publishers, agencies and advertisers must understand the true cost of bot fraud, what the real human CPMs are, and why C-level executives should be involved. Videology and White Ops see it as everyone’s job to address bot fraud, since everyone is a victim. Videology and White Ops announced a partnership to combat fraud in May. 

The full white paper can be downloaded here. 

Note, our closing session at the Dec. 1st SHIFT // 2015 Programmatic Video & TV Ad Summit will be digging into all of the fraud issues that are impacting programmatic and the broader online video ad industry. Learn more and register now!

(Note also: Videology is a VideoNuze sponsor)