Advertisers Brace for $71 Billion Loss in 2024 Due to Bot Clicks and Fake Traffic

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As the growth of ad spend slows to 5.3%, advertisers face a growing threat to their budgets – the surge in invalid traffic (IVT). New research conducted by the marketing efficiency platform Lunio reveals that in 2024, advertisers are projected to squander over $71 billion (£59 billion) on traffic stemming from invalid activities, including bots and automated scripts. This marks a significant 33% increase from the figures in 2022.

Lunio’s research delved into 2.6 billion paid ad clicks and 104 billion impressions sourced from 60,000 ad accounts across the platform’s clientele. The analysis unveiled that 8.5% of all paid traffic on major marketing channels, including Google, Meta, LinkedIn, X (formerly Twitter), and TikTok, is invalid. This equates to one in every 12 website visits being affected by invalid activity.

Beyond the financial implications, the study highlights that invalid traffic goes beyond merely wasting ad spend. It results in the squandering of marketers’ time on spam leads originating from fake clicks, leading to inaccurate budget allocations and unpredictable revenue forecasts. Ultimately, the impact of IVT is anticipated to cost businesses a staggering $204.8 billion (£168.6 billion) in lost revenue opportunities in 2024.

Among the channels scrutinized, LinkedIn stands out with the highest invalid traffic rate at 25%, implying that over $1.43 billion (£1 billion) of Ad Spend Forecast is expected to be wasted on fake clicks on the platform in the coming year. This elevated rate is attributed to the proliferation of fake profiles generated and utilized by marketers on the platform.

The research also sheds light on the cost disparity of invalid traffic across different channels. Non-Google platforms such as Meta, Bing, LinkedIn, X, and Pinterest experience a higher average IVT rate of 17.5%, resulting in a cost of $54.8 billion (£45 billion). In contrast, Google channels, including Search (including Shopping), PMax, Display, and YouTube campaigns, have a lower average IVT rate of 5.5%, amounting to $16.6 billion (£13.7 billion).

Neil Andrew, co-founder and CEO of Lunio, emphasized the increasing prevalence of bots, fake users, and fake clicks, describing them as pervasive issues that instantaneously waste budgets, distort analytics, and hinder sales teams. He emphasized the pressing need for marketers to gain new insights to maximize ad spend efficiency and eliminate sources of fake ad engagement in order to navigate a digital advertising landscape where every click, impression, and placement drives genuine value. The estimated loss of $204.83 billion (£169 billion) underscores the urgency for advertisers to address the challenges posed by invalid traffic and protect their investments in digital advertising.