The Impact ofInvalid Traffic
on Marketing
How bots and fake users poison
your entire marketing operation.

2

Table of contents
Introduction

3Foreward

4Methodology

5Findings
Executive summary
IVT rates for organic & direct traffic

6-14
6
7-10

IVT rates for paid traffic

11-14

Implications & insights

15-18

Summary

The Impact of Invalid Traffic on Marketing192

Lior Frenkel, Chairman, the Israel Cyber Forum

Chapter 1

Introduction

Recent years have seen advanced cyberattacks become the norm. 

Attack techniques, tools and technologies, traditionally solely accessible to governments, have leaked out. Today, they are readily available to serve criminal
agents and support the rapidly growing cybercrime sector. 

This trend, which will not end in the foreseeable future, is clearly demonstrated by theproliferation of ransomware attacks, advanced attacks by non-state actors, a focus onnational critical infrastructures, and the growing sophistication of attacks with criminal
motivations. Within digital marketing and ecommerce, it is evident that this rise inadversaries’ cyber capabilities is resulting in direct, and evident revenue loss tobusinesses across the globe. The impact is stark: producing higher customer
acquisition costs, which end up reducing the bottom-line performance. 

Furthermore, fake user accounts and bots, blur the view of organizations, skewing
forecasts, revenues and pipeline. This represents a growing cyber security concern.
This is a challenge that must be dealt with, sooner, rather than later.

”

Within digital marketing and ecommerce, the rise in adversaries’ cyber capabilities is resulting in direct revenue loss

The Impact of Invalid Traffic on Marketing3Foreward
Invalid traffic (IVT) has historically been a major concern

When it comes to paid marketing, when IVT is present,

for information technology and security teams reporting

audiences, CDP segments, and CRMs become polluted,

directly to the CISO. However, as today’s CMOs havecampaigns are optimized toward fake users, and revenue

realized, IVT is also a prevalent problem for marketers

opportunities are missed. Analytics and BI systems also areand go-to-market teams. 

affected by skewed data and a lack of actionable insights.
Additionally, website and conversion funnels are disrupted

IVT consists of bots, fake users, and otherwise invalid

by invalid leads and visitors. Because of the increasing

users and is becoming increasingly problematic fordemand for marketing security solutions, we decided toanyone looking to acquire customers online. 

release a study on IVT and the impact that it has onmarketing.

Today, IVT makes up 40% of all web traffic. Because ofthe prevalence of IVT, nearly every marketing funnel,
campaign, and operation is impacted to some degree,
oftentimes in very harmful ways.

The Impact of Invalid Traffic on Marketing

4Methodology
This study was conducted over the course of 10 months,
across campaigns, funnels, websites, and data from10,000+ CHEQ customers. The goal of this study was tobreak down Invalid Traffic activity across the marketing
operation. 

Invalid Traffic includes the following: 

Bot Traffic: Botnets, scrapers, crawlers, and automation tools. 

After categorizing the traffic, we broke down the Invalid
Traffic rates by traffic source (direct, organic, paid), industry,geolocation, device, and threat type. 

We then used these invalid rates, combined with externalmetrics, to calculate the impact Invalid Traffic has onmarketing generated revenue, sales operations, and BI
driven decision making. 

Malicious Traffic: Click farms, hackers, fraudsters, and fake accounts. 

Suspicious Traffic: Proxies (VPN), data centers, and excessive ratelimits. 

To determine the traffic’s validity, we performed over
2,000 real-time cybersecurity challenges to every site
visitor’s browser. Each visit was analyzed by ourIntelligence Engine, through our bot detection, user
validation, and behavioral analysis modules, categorized
visitors into valid and invalid, and segmented the invalid
visitors into different threat types. 

The Impact of Invalid Traffic on Marketing5

Executive summary
Invalid Traffic is an increasingly troubling issue that organizations of all sizes are

Chapter 2Findings

dealing with. This summary provides an overview of some of the key findings thatstood out, and that are also highly relevant to marketers and go-to-market teams.
The implications of these findings are billions of dollars in lost revenue, skewed
analytics, and sales labor cost.

27%

32%

32%

of organic and direct traffic is invalidof organic and direct traffic
from mobile is invalidof organic and direct traffic in the retail sector is invalid

$697B

$42B

$115B

is wasted globally on skewed data each year

is the amount of lost revenue
due to IVT each year

in sales labor costs is wasted on invalid leads

The Impact of Invalid Traffic on Marketing627%
Findings

IVT rates for organic& direct trafficof organic & directtraffic is invalid
While looking at organic and direct traffic,
27% was made up of bots and fake users.
This means that nearly a third of traffic foundin non-paid internet channels is invalid andcannot convert into real paying customers. 

Additionally, there are many factors such asindustry, device used, and threat type that
can affect how IVT impacts a given business.
Throughout these findings, we dive deeper
and break down organic and direct IVT.

The Impact of Invalid Traffic on Marketing7

Findings

IVT rates for organic& direct traffic
IVT rates by industry

Accounting & Auditing

In this section, we looked at Invalid Traffic rates byAdvertising & Marketing

industry. While overall Invalid Traffic from organic anddirect sources is 27%, this can vary by sector. 

Business Services

Computer Software / SaaS

The industries we analyzed had IVT rates ranging fromEducation/ Higher Education

8% to 30%+. Online purchase heavy sectors like retail,Financetravel & tourism, and insurance have displayed
generally higher rates of Invalid Traffic. Additionally,industries with a high customer acquisition cost, likehigher education and SaaS, also saw relatively higher
IVT rates. 

Gambling & Gaming

HealthInsurance

RetailTravel & Tourism

The Impact of Invalid Traffic on Marketing

11%

12%

9%

19%

30%

8%

15%

15%

18%

32%

18%

8Findings

IVT rates for organic& direct traffic

IVT rates by geography

IVT rates by device

We analyzed three key geolocations: NA, APAC, andEMEA. North America displayed the highest IVT rates,

32%

26%

16%

MobileDesktop

Tabletpossibly suggesting that digitally advanced markets
tend to attract more invalid, malicious, and fraudulent
activity.

25%

21%

12%

We analyzed IVT rates across mobile, desktop, and tablet.
The lowest IVT rates were found across tablets, suggesting
devices that are less in use attract less invalid activity. On
the flip side, the ubiquity of mobile devices and theNAAPAC

EMEA

prevalence of their usage has attracted the highest rates
of invalid or fraudulent activity.  

The Impact of Invalid Traffic on Marketing9Findings

IVT rates for organic& direct traffic
IVT rates by threat typeIn this section, we analyzed IVT by threat type. This helps
uncover specifically what types of invalid traffic and bots

General IVT*43%

Automation Tools

19%Disabled JS

16%

Data Centers

4.7%

Click Hijacking

3.9%

are most prevalent within organic and direct traffic. The
highest percentage came from General IVT (GIVT), whichrefers to the most common forms of bots such as web
crawlers, scrapers, spambots, and spiders. Combined withthe prevalence of Automation Tools (browser testing
software and headless browsers), over 60% of IVT comesfrom non-human automated bot traffic. 

The Impact of Invalid Traffic on Marketing103.5%
Findings

IVT rates for paid trafficof paid traffic is invalid

This portion of the report looks specificallyat paid marketing channels. This spans all
major advertising platforms including themajor search engines (like Google, Bing,Yahoo), social platforms (like Facebook,Instagram, Twitter, LinkedIn), and additional
paid channels like affiliate and partner
marketing.

We looked at the same break downs as we
did with organic and direct traffic, but thistime we analyzed only traffic that arrived bypaid campaigns.

The Impact of Invalid Traffic on Marketing11

Findings

IVT rates forpaid traffic
IVT rates by industry

Accounting & Auditing

Here, we looked at how different industries areAdvertising & Marketing

impacted by paid Invalid Traffic. The highest levels ofIVT were found in a few key industries including
Finance which had 10%, Gambling & Gaming which
had 9%, and Computer Software/ SaaS which had 8%. 

Travel & Tourism

Business Services

Computer Software / SaaS

Education/ Higher Education

The study found many disparities in IVT rates
depending on campaigns, CPA, platform, time of day,and season, making Invalid Traffic in paid marketing amore volatile threat that is harder to predict. 

Finance

Gambling & Gaming

HealthInsurance

RetailThe Impact of Invalid Traffic on Marketing

6%

3%

1%

2%

8%

6%

10%

9%

4%

2%

2%

12Findings

IVT rates for paid traffic

IVT rates by geography

Again, we are looking at IVT rates within NA, APAC,
and EMEA. When analyzing paid traffic, we saw thatIVT rates by device

2%

7%

4%

MobileDesktopTablet

APAC had the highest levels of IVT, marking a shift inregional IVT rates as compared with non-paid.

3%

5%

3%

While analyzing IVT rates by device, we discovered thatdesktop devices had the highest levels of Invalid Traffic at
7%. This indicates that malicious users who seek to attack

NAAPAC

EMEA

paid campaigns, typically do so from a computer rather
than a mobile device or tablet. 

The Impact of Invalid Traffic on Marketing

13Findings

IVT rates forpaid traffic
IVT rates by threat type
When we looked at paid traffic, we saw that malicious
Data Centers accounted for 1/3 of the Invalid Traffic in

Data Centers 

33%

Automation Tools

14%

VPNs

13%

Excessive Rate Limits

11%

False Representation8%

paid channels. VPN’s accounted for 13% and False
Representation accounted for 8%.

This indicates that users hiding behind proxy tools andservers or attempting to mask / manipulate theiridentity in various other ways, are an increasingly
serious challenge for paid marketers.

The Impact of Invalid Traffic on Marketing

14

Chapter 3

Implications & insights

The findings point to therise of IVT as a threat to thecontinuous sustainability of
online business. 

With up to 27% of traffic coming from invalid
sources, IVT is no longer a threat organizations
can ignore. 

We looked at three key areas that are essential
to the go-to-market operation, and further
analyzed the affect IVT is having on thesecomponents of business. The areas we coverare:
The affect of IVT on Revenu
The affect of IVT on Data
The affect of IVT on Resources The Impact of Invalid Traffic on Marketing

15

IVT costs businesses $42 billion
in lost revenue opportunities.

A key issue with IVT is that it takes up advertising budget

Based on the percentage of invalid traffic we uncovered,intended to be spent on driving revenue from potential

it was revealed that $42 billion in revenue is lost globally

customers. Marketers are constantly looking for aneach year due to Invalid Traffic on an additional $2.5

effective CAC (Customer Acquisition Cost) to LTV (Lifebillion in customer transactions.  

Time Value) ratio, so that every dollar they spend, yields
back a good return. But when ads are served to bots andThe findings suggest that marketing dollars lost on IVT

fake users, that portion of the budget is not generating

are much more than just wasted advertising budget, butreturns, therefore costing the business revenue

actually lead to substantial revenue losses. If a marketer

opportunities.

generates $5 of revenue for every $1 they spend, thenevery wasted dollar is $5 in revenue lost. 

To gauge the cost of lost revenue opportunities caused by
IVT, we first caluculated CAC:LTV ratios across all verticals

It should be noted that these lost revenue opportunites

to understand how much revenue is being generated

do not account for additional damages caused to thefrom every marketing dollar. We then looked at average

paid marekting apparatus, including polution of

IVT rates in each vertical, and derived from that how muchremarketing efforts and lookalike audiences, and skewing

marketing spend was being wasted. 

of automated optimization algorithms, which can causeeven more revenue loss down the funnel.

The Impact of Invalid Traffic on Marketing16

Data skewed by IVT costs
businesses $697 billion annually.

Virtually all meaningful business decisions are madeFor this reason, skewed data has become a strategic

based on data. This is why leading organizations spend

threat to the sustainability and well-being of data-driven

tens of millions of dollars each month on getting theirorganizations. 

data, analytics, and business intelligence right. Businessleaders seek to gain insights on how their organization is

But according to Harvard Business Review & IBM, badcurrently performing so they can project revenue, analyze

data is extremely prevalent, costing the US over $3 trillion

the effectiveness of their go-to-market strategies, evaluate

per year. Our analysis suggests that 10% of that bad data

growth opportunities, and forecast their business.

is a direct or indirect result of IVT. Considering the U.S.
accounts for 43% of the Big Data market, we can quantify
the global cost of data skewed by IVT is $697 billion”annually. 

According to Harvard Business
Review & IBM, bad data costs theUnited States about $3 trillion peryear

The Impact of Invalid Traffic on Marketing 17

$115 billion in sales labor costs
are wasted on invalid leads.

As our findings revealed, IVT is especially prevalent inBased on the global spend on sales headcount, as well asorganic and direct channels with a 27% invalid rate

CHEQ’s own IVT data, our analysis revealed that a total ofacross locations and industries. That is a significant$425 billion in workforce resources spent on active selling.

amount of users that will not convert into real paying

Furthermore, since 27% of non-paid traffic is invalid, thatcustomers, yet they flood inbound pipelines and CRMs,

means that $115 billion in sales labor costs are wasted on

wasting the sales team’s precious time and energy. 

prospecting and nurturing invalid leads that will neverconvert into paying customers. 

Today, it is estimated that 13 million people work in sales,and according to ZipRecruiter the average global
Account Executive salary is about $109,000. That totals$1.4 trillion spent on sales headcount each year. It is also
estimated that about 30% of an Account Executive’s timeis spent on actively selling to new prospects. 

The Impact of Invalid Traffic on Marketing Chapter 4Summary

The report uncovers the magnitude andscale of IVT, and how it is becoming astrategic issue impacting the sustainability
and well-being of online business. 

The report uncovered that 27% of all organic and direct traffic is invalid,
consisting of a wide array on non-human, automated, malicious andsuspicious users. Within certain industries like Retail, the IVT rate can go as
high as 32%, but even the ‘cleanest’ industry (Finance) still suffered from an
8% Invalid Traffic rate.

The large scale and growing prevalence of IVT, is leading to substantial harmfrom online business & marketing performance, including: $42 Billion in lost
revenue opportunities, due to misplaced marketing budget. An additional$115 Billion, in sales labor costs, wasted on prospecting and nurturing invalidpipeline and leads. A further $697 Billion are lost due to decisions,forecasting and planning made based on skewed data.

The Impact of Invalid Traffic on Marketing19