Non-human Traffic Causes $1.6 Billion Loss to Advertisers a Year

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Dec 19, 2013, 08:00 ET

BEIJING, Dec. 19, 2013 /PRNewswire/ -- Non-human traffic affecting the Internet advertising market has caused nearly US$ 1.6 billion in losses to advertisers in China from July of 2012 to June of 2013, according to data shown by Miaozhen Systems, a Chinese leading third-party advertising technology company.

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China saw its Internet users grow rapidly over the past years, reaching 591 million at the end of June, with mobile Internet users hitting 464 million, according to data from the China Internet Network Information Center. Since the debut of online advertising by IBM in 1997, the Internet has become the second-largest advertising media portal after television so far in China. Meanwhile, it is expected that China's online advertising market will break nearly 20 billion dollars this year. However, risks arising from non-human traffic, such as fraud impressions and clicks, are increasing accordingly, which has not only led to huge loss to advertisers, but also damaged the credibility of the industry as a whole.

Varies with different media types

Advertisers face different media with different purchase models, thus comes different characteristics of non-human traffic. Overall, as advertisers have paid more attention to online non-human or fraud traffic and anti-fraud technology has improved, it shows a decline compared to previous years. In terms of media type, vertical sites sat on the top of non-human traffic, with abnormal impressions and click-through rates (CTR) at 21.67 percent and 33.35 percent respectively, followed by ad networks. Portal sites had 11.18 percent abnormal impressions and 23.72 percent CTR. Video sites saw the least non-human traffic, with the two indicators at 9.4 percent and 19.42 percent respectively.

By industry, auto and telecommunications were hit the worst, with abnormal impressions at 32.12 percent and CTR at 23.5 percent, while food & drink and the fast moving consumer products industry saw the lowest rate at 8.52 percent and 11.88 percent respectively.

For geography, first-tier cities saw lower non-human traffic at 14.25 percent, while others were at 20.01 percent, according to the data.

Inferior as superior

Unlike online abnormal "machine-made" traffic before 2012, which could be checked easily through third- party professional verification, abnormalities in geography, time slots and ad positioning are currently unidentified as three major fraud traffic behaviors.

Some publishers cheated on advertisers, advertising elsewhere when the advertisers' target markets were first-tier cities; around 22.12 percent of campaigns encountered such problems. Additionally, some ads were played between midnight and 8 am, which is believed to be the worst time slot with the least audience exposure, accounting for 14.81 percent. Advertising on unpopular programs or positions with poor exposure also hurt effectiveness, and such campaigns accounted for 4.2 percent of total advertising exposure, the data showed.

Shift to mobile terminals

With the penetration of mobile Internet, more and more advertisers have shifted more advertising expenditure to mobile terminals. Among over 200 brands served by Miaozhen, almost one-fourth of them spent on mobile Internet advertising. Around 51.1 percent of advertising went to mobile Internet alliances, 42.92 percent went to mobile video, and the remainder was spent on e-magazines and other news applications. Meanwhile, non-human traffic also transferred from PCs to mobile terminals.

Similar to cheating tricks on PC terminals, some mobile publishers displayed advertising on inferior APP platforms, pretending to be superior ones. Additionally, some advertisers reaped in fat profits by displaying advertising at non-iOS mobile terminals, despite the desire to target iOS terminals. For CPC or CPA-based advertising, fraud click-through rates or registered users were also a major contributor to traffic cheating, and advertisers hit the hardest by such campaigns were mainly in the industries of online games, e-commerce and mobile apps, according to the data.

To fight against ad fraud in the mobile Internet market, industry regulators and players have joined hands and rolled out several standards, such as API and SDK, to improve supervision and evaluation of mobile advertising in a move to promote healthy development of the industry.

Miaozhen has called for effective control of online non-human traffic, as it has led to huge losses for advertisers, hurt effectiveness of advertising and damaged the credibility of the industry as a whole. Clamping down on data fraud will be a key to the healthy and sustainable development of the market.

About Miaozhen Systems

Miaozhen Systems is a leading third-party advertising technology company in China. Founded in 2006, with more than 300 employees, Miaozhen Systems is a novel high-tech enterprise. Miaozhen Systems has its headquarters in Beijing, with branch offices in Shanghai, Guangzhou and Singapore.

Miaozhen Systems process over 3TB of data per day, with a data processing capability of 100 billion ad requests every day. The cumulative data storage is over 3PB. The exclusive Moment Tracking Technology helps advertisers, agencies and publishers in efficiently measuring online campaign impact (including reach, frequency and demography of target audience), and enhances their online advertising returns. Various leading multinational brands including P&G, Microsoft, Coca-Cola, Volkswagen, L'Oreal and KFC are using tools and solutions provided by Miaozhen Systems.

Please log on to www.miaozhen.com for more information.

SOURCE Miaozhen Systems