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

2

Table of contents
Introduction

3Forward

4Methodology

5Findings
Executive summary
IVT rates for organic & direct traffic

6-14
67-10

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. Thisis 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

Forward
Invalid traffic (IVT) has historically been a major concern for
information technology and security teams replorting
directly to the CISO. However, as today’s CMOs haverealized, IVT is also a prevalent problem for marketers andgo-to-market teams. 

IVT consists of bots, fake users, and otherwise invalid users
and is becoming increasingly problematic for anyone
looking to acquire customers online. 

When it comes to paid marketing, when IVT is present,
audiences, CDP segments, and CRMs become polluted,
campaigns are optimized toward fake users, and revenue
opportunities are missed. Analytics and BI systems also areaffected by skewed data and a lack of actionable insights.
Additionally, website and conversion funnels are disrupted
by invalid leads and visitors. Because of the increasing
demand for marketing security solutions, we decided torelease a study on IVT and the impact that it has onmarketing.

Today, IVT makes up 40% of all web traffic. Because of theprevalence 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,

After categorizing the traffic, we broke down the Invalid

across campaigns, funnels, websites, and data from

Traffic rates by traffic source (direct, organic, paid), industry,

10,000+ CHEQ customers. The goal of this study was togeolocation, device, and threat type. 

break down Invalid Traffic activity across the marketing
operation. 

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

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

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

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

To determine the traffic’s validity, we performed over 2,000
real-time cybersecurity challenges to every site visitor’sbrowser. Each visit was analyzed by our Intelligence
Engine, through our bot detection, user validation, andbehavioral 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.

The Impact of Invalid Traffic on Marketing27%of organic and direct traffic is invalid

32%

of organic and direct traffic
from mobile is invalid

32%

of organic and direct traffic in the retail sector is invalid$697B

is wasted globally on skewed data each year

$42B

is the amount of lost revenue
due to IVT each year

$115B

in sales labor costs is wasted on invalid leads

6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

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

IVT rates by device

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%of paid traffic is invalidFindings

IVT rates for paid traffic

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 levelsof IVT were found in a few key industries including
Finance which had 10%, Gambling & Gaming which
had 9%, and Computer Software/ SaaS which had8%. 

The study found many disparities in IVT rates
depending on campaigns, CPA, platform, time ofTravel & Tourism

Business Services

Computer Software / SaaS

Education/ Higher Education

Finance

Gambling & Gaming

day, and season, making Invalid Traffic in paid

Healthmarketing a more volatile threat that is harder toInsurance

predict. 

The Impact of Invalid Traffic on Marketing

Retail

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 at7%. 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
paid channels. VPN’s accounted for 13% and False
Representation accounted for 8%.

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

The Impact of Invalid Traffic on Marketing

Data Centers 

33%

Automation Tools

14%

VPNs

13%

Excessive Rate Limits

11%

False Representation

8%

14Chapter 3

Implications & insights

The findings point to therise of IVT as a threat to thecontinuous sustainability ofonline 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 $42billion 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, it

indented to be spent on driving revenue from potential

was revealed that $42 billion in revenue is lost globally eachcustomers. Marketers are constantly looking for an affective

year due to Invalid Traffic on an additional $2.5 billion in

CAC (Customer Acquisition Cost) to LTV (Life Time Value)customer transactions.  

ratio, so that every dollar they spend, yields back a goodreturn. But when ads are served to bots and fake users,

The findings suggest that marketing dollars lost on IVT arethat portion of the budget is not generating returns,

much more than just wasted advertising budget, but actually

therefor costing the business revenue opportunities.

lead to substantial revenue losses. If a marketer generates $5of revenue for every $1 they spend, then every wasted dollar

To gauge the cost of lost revenue opportunities caused byis $5 in revenue lost. 

IVT, we first caluculated CAC:LTV ratios across all verticals
to understand how much revenue is being generated fromIt should be noted that these lost revenue opportunites doevery marketing dollar. We then looked at average IVT

not account for additional damages caused to the paid

rates in each vertical, and derived from that how much

marekting apperatus, including polution of remarketing

marketing spend was being wasted. 

efforts and lookalike audiences, and skewing of automatedoptimization algorithms, which can cause even 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 made based

For this reason, skewed data has become a strategic treat

on data. This is why leading organizations tens of millions

to the sustainability and well-being of data-drivenof dollars each month on getting their data, analytics, andorganizations. 

business intelligance right. Business leaders seek to gain
insights on how their organization is currently performing

But according to Harvard Business Review & IBM, bad dataso they can project revenue, analyze the effectiveness ofis extremely prevalent, costing the US over $3 trillion per

their go-to-market strategies, evaluate growthyear. Our analysis suggests that 10% of that bad data is aopportunities, and forecast their business.

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 the UnitedStates about $3 trillion per year The Impact of Invalid Traffic on Marketing17$115 billion in sales laborcosts 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 across

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

users that will not convert into real paying customers, yet

Furthermore, since 27% of non-paid traffic is invalid, thatthey flood inbound pipelines and CRMs, wasting the sales

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

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 AccountExecutive salary is about $109,000. That totals $1.4 trillion
spent on sales headcount each year. It is also estimatedthat about 30% of an Account Executive’s time is 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 and suspicious
users. Within certain industires 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 prevelance of IVT, is leading to substantial harmfrom online business & marketing performance, including: $42 Billion in lost
revenue opportunities, due to misaplced 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, forecastingand planning made based on skewed data.

The Impact of Invalid Traffic on Marketing19