According to a new study, computers controlled by hackers “view” about a quarter of all video ads on the Web. In other words, 25% of inventory sold to advertisers is useless. The study will hurt the effort of major media companies as they turn to video ads as a major revenue source to offset falling sales in traditions portions of their business.
According to Bloomberg:
Computers being remotely operated by hackers account for almost one in four views of digital video ads worldwide, according to a study that estimates such fraud will cost advertisers $6.3 billion dollars next year.
Also:
The fake views, which also account for 11 percent of other display ads, often take place in the middle of the night when the owners of the hijacked computers are asleep.
The effects have begun to become devastating:
Left unchecked, advertisers will lose $6.3 billion globally due to the fraud in 2015, said Michael Tiffany, chief executive officer of White Ops Inc., a cybersecurity company based in New York that conducted the study (which posted the numbers).
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At some point soon, it is logical that major marketers will abandon online video ads, or at least cut their exposure.
While Twitter Inc. (NYSE: TWTR), Facebook Inc. (NASDAQ: FB) and the YouTube division of Google Inc. (NASDAQ: GOOG) hope their revenue will be augmented by video ads, their traditional businesses continue to grow. The same cannot be said for media such as the New York Times Company (NYSE: NYT), the Weather Company and CBS Corp. (NYSE: CBS), which need video advertising to grow at all, or at least to cover drops in traditional print and television advertising.
One of the problems with “robot” viewing of video ads is that the perpetrators are likely as sophisticated as those hackers who attack government websites, retailers like Target Corp. (NYSE: TGT) and entertainment companies like Sony Corp. (NYSE: SNE). Their skills allow them to stay ahead of the solutions meant to block their actions.
The danger of robot viewing of ads is not just that it is occurring now, but that it could grow in the future as video ads become a more essential part of the overall revenue of large, traditional media companies.
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