Google takes on ad fraud issue by refunding advertisers for traffic generated by bots

Key highlights:

• Google has issued refunds to hundreds of advertisers for running ads on websites with fraudulent traffic
• Refunds represent only a small portion of the original spending - 7% to 10%
• Businesses globally are expected to lose a massive $16.4 billion to online advertising fraud in 2017

In a move that may be the first in a battle against advertising fraud, Google has issued refunds to hundreds of advertisers for running ads on websites with fraudulent traffic generated by automated bots.

Besides tackling ad fraud, this could also help them to bring more authenticity to their metrics which advertisers question in terms of the return on investment (RoI) with ad fraud growing.

The refunds represent only a small portion of the original spending - 7% to 10% - since rest of the money has already been passed on to site owners and middlemen, according to the Wall Street Journal on Sunday.

This comes after a report by ad verification company Adloox stated that businesses globally are expected to lose a massive $16.4 billion to online advertising fraud in 2017. It further said that 20% of the total digital ad spends were wasted in 2016 due to ad fraud.

Alphabet, Google's parent company, informed marketers and ad agency partners that their ads shown through the search engine had garnered fraudulent traffic generated by bots, which certainly would never click on their ads they had paid for to be shown.

"Today, we can't disclose the information about third parties. So when we aren't able to catch invalid traffic before it impacts our advertisers and we're unable to refund their media spent, it hurts us, even if we're not responsible," Scott Spencer, director of project management at Google, was quoted as saying.

Spencer added that the meager refunds had been paid back to advertisers.

According to the report, the refunds primarily involved video advertising and highlight a persistent issue that threatens the health of commercial content online.

Google has geared up to resolve the issue. It is believed that the search engine will provide more clarity over which tech providers in the ad-buying chain are responsible for making the refunds.

Ad fraud has been one of the highest in India too with ad fraud in the country 2.4 times higher than the global average. And mobile app install fraud is 1.7 times higher, according to a recent TUNE report.

Mobile fraud in India is much higher at 31.9% than the global mobile ad fraud average of just over 15%. India came in at tenth spot in terms of mobile app install fraud in the world.

Indian marketers and advertisers are expected to lose $350 million of their marketing spends to fraudsters in 2017, said the report.

(With inputs from IANS)

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