What percentage of ads are viewed by bots?
It is impossible for the public to know because we have no way to audit all the web traffic.
20% — 99% would all be reasonable guesses.
This doesn’t affect the valuation of Facebook or Google because the buy-side doesn’t have any alternatives to the two. If you want to run digital advertising, you have to go with Facebook or Google.
Facebook and Google make their ad dollars from two types of ads:
- Newsfeed ads and search ads. These logged in experiences are (theoretically) resilient to fraud. FB and Google make the vast majority of their money serving feed and search ads, respectively.
- Third-party display ads. Google Display Network and Facebook Audience Network are display ad networks that allow an advertiser to run ads on sites all over the internet while leveraging Google and Facebook data. These ads are not explicitly viewed in a logged in experience so they have lots of bots. Google and FB could probably clean these up a lot.
It takes serious imagination to picture any world where the market puts so much scrutiny into bot traffic that it impacts Google and Facebook’s bottom line.
Even if there were the desire for more transparency, it’s not clear to me how you would achieve it. Do you audit Facebook and Google for their human identifier techniques? Those are probably deep learning algorithms that they wouldn’t even be able to explain.
If there were this desire for transparency, and FB and Google were (somehow) forced to publicize their data about ads and bots, and there was a forced crackdown on illegitimate traffic — even then it’s not clear to me that it would materially affect them.
- The bear case: it could turn out that lots of FB users and Google users are bots and that ad dollars are being wasted on logged in experiences. It is not unreasonable to surmise that adtech has been pervaded with circa-2008 Wall Street-level sketchiness, with FB and Google playing the role of the credit ratings agencies.
- The bull case: If the market really started to care about fraud, FB or Google could verify humans more aggressively before displaying an ad. Even if this reduced the number of ad impressions purchased, the market for those ad impressions would be bid up. In this kind of atmosphere, the market would consolidate around FB and Google even more since none of the other vendors can do as good of a job verifying identity.
tl; dr: Google and Facebook are hedged. If the market starts to care more about bots, they can put more effort into identity.
Originally published at www.quora.com.