In our latest report, we took an in-depth look at invalid traffic (IVT) across the financial services industry. 

The report analyzed over 38.2M clicks from a sample of Lunio clients across the retail banking, investment banking, and insurance sectors. And a glance at some of the key findings shows the true extent of the problem: 

• The average daily IVT rate across the entire industry is 7.52%. Meaning roughly every 1 in every 13 paid ad clicks across the industry are invalid. 

• The insurance sector was worst affected with an average daily IVT rate of almost 10% and a staggering maximum recorded IVT rate of 60%.

• For an insurance business with an annual ad spend of $10M, on average $957,000 is wasted on invalid clicks per year. And by factoring in a conservative return on ad spend (ROAS) of 3:1 this translates to $2.87M in lost revenue opportunity annually.

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Note: Read the full report for an in-depth analysis of the commercial impact of IVT across each sector - including ad spend wasted on invalid clicks, and average lost revenue opportunities. 

The rise of sophisticated bots 

78.5% of all invalid traffic detected was classified as sophisticated invalid traffic (SIVT), while only 21.5% was classified as general invalid traffic (GIVT). 

This presents a unique challenge. SIVT is deployed by malicious actors deliberately attempting to mimic legitimate user behavior and evade detection. In contrast, GIVT is often self-declaring and easily detected by identifiable markers in the data associated with the click. 

This finding indicates the basic protection put in place by ad platforms currently lack the rigor to identify and protect financial services businesses against SIVT. 

Problematic ad placements 

The report also identified that many placement domains on which financial services ads are served tend to generate very low quality traffic. 

Most of the worst performing domains were classified as either made-for-advertising (MFA) sites or gaming sites.  Average daily IVT rates across the top 10 worst performing placement domains ranged from 17% to an eye-watering 85%. 

Made for advertising sites

MFA sites generally host low-quality and AI-written content, duplicate articles, fake news, and dubious links. They often masquerade as relevant and high-value ad inventory, but their sole purpose is to generate revenue for the publisher at the expense of advertisers. As a result, traffic stemming from MFA sites tends to be commercially worthless.

Gaming sites

Mobile and desktop gaming sites were also prominent amongst the worst performing domains we analyzed. These sites often attract large volumes of traffic, but many of the ad clicks they generate are low quality or invalid. Gaming sites are frequently targeted by sophisticated bots that can automate in-game activity, which benefits fraudsters as detection becomes more difficult. 

Why aren’t ad platforms combating IVT? 

Many marketers trust ad platforms to detect and remove the invalid traffic affecting them on their behalf. Yet our research shows large volumes of SIVT continue to “slip through the net”. 

Analyzing traffic in real-time is expensive and the costs ramp up the longer it takes machine learning models to make a classification decision. This ultimately makes it financially unviable for ad platforms to aggressively clamp down on the SIVT problem. 

Advertisers who rely solely on ad platform IVT protection will be unaware of the true extent of invalid traffic affecting their campaigns, wasting ad spend and diminishing campaign performance.

How to combat IVT

Unfortunately, the rapid proliferation of sophisticated bots means that it’s impossible to eliminate IVT completely. But businesses are able to significantly reduce both GIVT and, crucially, SIVT rates – by implementing advanced machine learning based detection tools such as Lunio. 

While the average daily IVT rate was 7.52% for unprotected accounts, this dropped to 4.52% for accounts protected by Lunio — a 40% reduction in average IVT rate, which has significant commercial value. 

Lunio works by seamlessly integrating with all major ad platforms, allowing you to identify and eliminate invalid traffic at scale

If you’d like to find out the average IVT rate across your own campaigns, you can request a free 14-day traffic audit from Lunio. Our machine learning algorithms will monitor and analyze all your paid ad clicks, and at the end of the audit you’ll receive a report detailing which channels, campaigns, keywords, and placements are worst affected.