Solve Media?s analysis of fraudulent traffic on CPG-related Web sites found that mobile bot traffic in the CPG vertical was 21 percent higher than global norms and 40 percent higher than United States mobile traffic. The increase underscores the potential for abuse of the system as investments in mobile advertising increase, particularly in CPG brands.

?This can definitely be attributed, in part, to inefficient mobile advertising,? said Ari Jacoby, CEO with Solve Media, a New York and Washington-based maker of the Type-In online and mobile advertising platform. ?Targeting is an issue, but it is outside of fraud and bots. 

?As more money is invested in mobile advertising, the fraudsters are following,? he said. ?By ignoring the problem and not proactively working to stop advertising fraud, the issue perpetuates.  The newness of the technology also plays a role? it is inherently less secure.? 

The rise in CPG suspicious traffic contrasts with a 16 percent drop globally and a 19 percent drop nationally.

The higher CPG bot numbers correspond with a spike in CPG mobile advertising spend. Mobile ad exchanges Smaato, Millennial Media and Nexage all saw significant increase in CPG mobile spend in the second quarter, especially in programmatic. Mobile advertising spend is estimated to reach $18 billion by the end of 2014, up 83 percent from last year, according to Gartner.

In digital advertising, advertisers often pay for a certain amount of impressions, or instances that their ads get ?seen.? Unfortunately, not all impressions are generated by humans, with a significant percentage generated by bots running automated tasks over the Internet. 

Not all bots are bad. Google runs bots for research, for example. Many bots, however, are designed to spam, register fraudulent accounts and steal ad budgets by generating fake traffic and injecting themselves into a very insecure advertising supply chain. 

Even the so-called good bots are non-human, so ads served to them are still wasted. If an advertiser is paying a cost per thousand, up to half of that money could be wasted on ads being shown not to potential customers, but to bots. When scaled across all digital and mobile ad campaigns, the amount of money wasted becomes significant.

 

But fraud follows the money, and the issue will only increase as advertisers move more and more of their budget to mobile.

 

The mobile platform has historically seen less bot traffic than display, but with mobile marketing and commerce on the rise, mobile bot traffic is climbing. 

If mobile marketers ignore this issue, they could be wasting up to 23 percent of their budgets on bots, which have a zero percent chance of converting to a sale, according to Mr. Jacoby. Security also needs to improve, affecting handset manufacturers, middleware and the mobile ad ecosystem, the executive said.

 

CPG advertisers can combat bot fraud by working directly with publishers who implement significant security measures or with technologies that can verify human engagement, he said. Seeking cost per engagement advertising options is another healthy way to mitigate risk.

It is up to buyers to take a proactive stance against fraud.

?Some publishers are indifferent to, or even profit from, bot fraud,? Mr. Jacoby said. ?Some are unwitting participants. Therefore it is up to buyers to take action.

?Ignoring the ad budget waste or simply attributing it to the cost of doing business will not fix the problem ? bot fraud will only go away when advertisers stop paying for it,? he said. ?Marketers are now asking their agency partners to take prophylactic measures, like using data that guarantees a human audience.?