Invalid Traffic: The Budget-Eating Black Hole [Webinar]

Invalid traffic (IVT) isn’t a security problem. It’s a marketing black hole.  

It instantly wastes budget – because those “visitors” will never convert. 

And the financial costs continue to stack up when you consider lost revenue opportunities. The return on ad spend for invalid clicks is always 0:1, which stifles business growth. 

IVT also distorts analytics, leading to unwise budget allocation. Spam leads, which often follow fake clicks, contaminate CRMs, wasting the time and energy of sales teams. And the explosion of advertising automation is only making the problem worse. 

So to help marketers better understand the issue and its impact on businesses, we dissected key findings from our Wasted Ad Spend Report 2024: The Global Impact of Invalid Traffic in a recent webinar. 

Lunio’s 2024 Wasted Ad Spend Report  

The Wasted Ad Spend Report was created by analysing billions of paid ad clicks from thousands of Lunio customers. This helped us expose the extent of the invalid traffic problem across different industries, regions, ad channels, and more. 

In addition to our own data, we also partnered with Integral Ad Science (IAS) and Scope3 to give a more complete overview of the problem and its downstream consequences. 

IAS specialise in verifying programmatic media buying, and their data enabled us to dive even deeper into global paid traffic trends affecting advertisers. And data provided by Scope3, the world’s largest database of digital advertising emission factors, allowed us to gain a unique understanding of the environmental impact of IVT and the digital ad industry more broadly. 

The webinar recording below explores key insights from the report. But further information and in-depth analyses are available within the report itself. Expect to learn:

• Average IVT rates across all major ad platforms 
• IVT rates by industry, region, and company size 
• Lost revenue opportunities due to IVT for 2023 & 2024 
• Top 3 concerns affecting performance marketers in 2023 
• Strategies to minimise wasted ad spend across all channels 
• How to reduce your paid media carbon emissions 
• And lots more!  

Download the 2024 Wasted Ad Spend Report 

Webinar Recording 

In the first instalment of our three-part Wasted Ad Spend Report webinar series, we spoke to Scott Pierce, Head of Fraud Prevention at Integral Ad Science, and Anne Coghlan Co-Founder and COO at Scope3. Scott and Anne were joined by Lunio’s CEO Neil Andrew, and the conversation was hosted by Lunio’s Content Manager, James Deeney.

Our aim was to provide a data-driven picture of the threat posed by invalid traffic, and empower marketers with insights on how to maximise ad spend efficiency, eliminate sources of fake ad engagement, and reduce their carbon footprints. 

Webinar Timestamps 

• 00:00 – Intro 
• 08:55 – Agenda 
• 09:55 – What is invalid traffic (IVT)?
• 11:45 – The business impact of IVT
• 17:25 – IVT in the era of AI and automation 
• 18:55 – Invalid activity at the pre-click impression level 
• 23:00 – Maximising viewability rates to reduce wasted spend 
• 27:28 – The environmental impact of digital advertising and IVT 
• 44:30 – IVT rates broken down by channel (Google Search, Meta etc) 
• 50:45 – How marketers can reduce their carbon footprints 
• 52:00 – Q&A 

TL;DR – Key Takeaways 

• We evaluated a sample of more than 2.6 billion paid ad clicks from Lunio customers over the course of 12 months (May 2022 – May 2023). This data set revealed 8.5% of all paid traffic was invalid. 

• When the 2.6 billion clicks were segmented by Google vs non-Google channels it revealed a significant difference – IVT rates were much lower on Google channels. 5.5% of traffic coming from Google channels was invalid while 17.5% of traffic coming from non-Google channels was invalid. 

• $54.63 billion in ad spend was lost to IVT in 2022. And $71.37 billion in ad spend is forecasted to be lost to IVT in 2024. This represents a 33.1% increase over a two year period.

• A study conducted by leading data company Nielsen revealed that the average return on ad spend across all industries is 2.87:1. When applied the the wasted ad spend forecast this equates to $204.83bn in lost revenue opportunity for brands and advertisers in 2024. 

• 69.7% of marketers surveyed for the report acknowledge problems with spam or fake lead submissions originating from their paid media campaigns. This represents a significant challenge, both in terms of cost and operational efficiency. 

• ChatGPT has made it easier for individual bad actors to create and operate bot networks at scale. This is contributing to the IVT problem as individuals are harder to detect than organised fraud networks. 

• A combination of pre-bid optimisation (e.g. IAS) and post-click protection (e.g. Lunio) can work hand in hand.Post-click data reveals insights about on-site behaviour to detect and exclude invalid traffic at a level not possible with viewability data only. Pre-bid impression-level data reveals opportunities to maximise viewability and engagement rates for every ad served before the clicks even occur.  

• Annual viewability averages worldwide have risen 9% between 2019 and 2022. This long-term upward trend has pushed average viewability levels to hover between 70% and 75% for several years, with the global average reaching 73.6% in H2 2022.

• Taking the global average for viewability in H2 2022, 26.4% of impressions served during this time period were non-viewable ads. This represents a significant source of ad spend inefficiency within programmatic ad campaigns. 

• Striving for ever-increasing levels of viewability can result in a law of diminishing returns, whereby the financial cost required to achieve 100% can actually hinder profitability. Therefore striking a balance is the key to maximally efficient spending. By using the appropriate pre-bid segments, performance marketers can maintain relatively high viewability, maximise conversions, and maintain a competitive cost-per-conversion.

• Programmatic display alone generates 3.8 million metric tons of carbon dioxide emissions globally every year. That’s equivalent to 427,000,000 gallons of gasoline consumed or more than 10.5 billion miles driven in the average family car.

• Serving 1,000 impressions uses the same amount of energy required to fully charge 40 smartphones. 

• Climate risk inventory represents extremely high carbon domains, the worst emitting media properties which are typically fraud, made-for-advertising (MFA), or low-value inventory. 

• “Made-for-Advertising” (MFA) is a subset of climate risk inventory. These sites masquerade as prime real estate for online advertising, but ads placed on them yield little impact on consumer behaviour. Placements on MFA sites make up 15% of total advertiser spend, according to an ANA study recently published.

• 561gCO2e is wasted on invalid traffic for every 100 paid ad clicks. That’s equivalent to driving an average car for 1.4 miles. 

Average IVT Rates by Channel

Lunio click data revealed notable differences in invalid traffic rates across individual channels. These are presented from highest to lowest below. 

Full analysis of each ad channel is available in the full-length report. 

• LinkedIn = 24.64% 
• Google Video Partners = 24.55% 
• X (formerly Twitter) = 23.61%
• Meta = 17.52%
• Pinterest = 14.00% 
• TikTok = 9.19% 
• Microsoft Ads / Bing = 8.46% 
• Google Display Network = 7.32% 
• Performance Max = 5.96%
• Google Search (inc. Shopping) = 4.72% 

About IAS

Integral Ad Science (IAS) is a leading global media measurement and optimization platform that delivers the industry’s most actionable data to drive superior results for the world’s largest advertisers, publishers, and media platforms. IAS’s software provides comprehensive and enriched data that ensures ads are seen by real people in safe and suitable environments, while improving return on ad spend for advertisers and yield for publishers. Our mission is to be the global benchmark for trust and transparency in digital media quality. For more information, visit integralads.com. 

About Scope3

Scope3 is on a mission to decarbonise media and advertising. For organisations seeking to make carbon-aware business decisions, Scope3 is the supply chain emissions data standard that delivers an accurate, comprehensive, and independent emissions model for every company in the digital ecosystem.Leveraging an open-source and science-backed methodology, Scope3 emissions intelligence data powers the tools brands, agencies, publishers and technology providers use to measure, understand and take action to reduce their carbon footprint. Founded in January 2022, Scope3 has a global workforce distributed across North America, Europe and APAC.