What is the current scenario for ad fraud in the industry and how large is its impact on the digital economy?
Mobile ad fraud remains a significant and pervasive problem within the digital advertising ecosystem. According to estimates, mobile ad fraud costs advertisers more than $6.5 billion. In India the situation is far worse. Mobile Ad fraud is costing marketers around $330 mn in India. Mobile advertising click fraud in India is 2.5X higher than global averages, and mobile app install fraud is 1.5X higher.
With digital ad spends in India expected to grow by 10% , with almost all of the digital ad spends on mobile due the country’s rapid growth in mobile internet penetration. However, Indian marketers will be handing around $330 million of their marketing spends to fraudsters.
Mobile ad fraud comes into play when the traffic to an ad is invalid or fake. These can be in the form of faked impressions, click spam or even faked installs.
Mobile Ad Fraudsters are smart and are aware of the strategies to make quick money. While several tools with various algorithms exist, frauds have been conducted by various stake holders making it tougher to crack. Advertisers want performance, the fraudsters deliver it just like the genuine publishers which is hard for the advertisers to catch.
According to a report, India is an exploding market for mobile, the country is adding new smartphone owners faster than any other market on the planet.
With this, entrepreneurs are coming up to take new market share, getting good funding from venture capitalists and launching new mobile apps at a fast pace. However, with this investment, the pressure on these start-ups to grow quickly comes into picture and fraudsters take advantage of this situation.
What are the biggest challenges faced by Brands & Networks in creating their Business & Marketing Strategies, due to ad fraud.
Brands: Ad fraud remains one of the biggest challenges for mobile marketers. Mobile fraud takes many forms and demands a multi-layered approach to fraud protection, detection and prevention. While app marketers have tried to mitigate fraud in their campaigns by blacklisting IPs and the offending sub-publishers, fraudsters are constantly finding new ways to conduct fraud.
Advertisers need to work closely with mobile measurement platforms to understand and identify the different types of fraud, which includes impression fraud, click fraud, app install fraud, and engagement and purchase fraud.
Lack of transparency is a big challenge for Brands. Thus, fraud detection tools play an important role here. So being able to identify what’s coming in without knowing the true source of the traffic has been a big challenge for the brands. Brands are continuing to waste billions of pounds on digital ads that consumers never see despite repeated warnings over the prevalence of ad fraud.
Networks: Affiliate Networks are facing a number of challenges. Due to mobile ad fraud, networks face huge deductions in the numbers and thus the billing. Thus, they are unable to project numbers, commit targets and meet clients’ expectations. There are huge revenue losses due to the deductions. It impacts their reputation and relationship with brand. It takes extensive efforts for the networks to on-board a new client. However, one bad show on account of fraud spoils it all.
What steps do you think can be taken to contain this menace, and how should Brands and Networks go about trying to curb it?
From Network Perspective:
- Detailed traffic analysis/KYC should be done for all the publishers. Networks should avoid affiliates where there is a lack of transparency. Network check the traffic quantity using tools like Similar Web, Alexa etc to see if they have enough traffic to meet the goals
- No re-brokerage of campaigns -this reduces margins for final pub thus encourages fraud
- Networks should never push an affiliate beyond his capacity to deliver more than what he can. This enables him to do fraudulent activities.
- Networks keep a close watch on the Time to Install. If it is too less or too high, it is a concern.
- Networks should also check if there are multiple installs coming from same IPs
- There are internal benchmarks established on CTR, conv % etc within the networks. These benchmarks help them to understand & identify incent traffic Affiliate networks are focused on operational solutions to curb fraud rather than technological. Technological experts are already doing this. Networks want to add another layer of fraud detection over n above the technological solutions that exist.
- Networks analyze hourly reports on a regular basis to weed out incent/poor quality traffic.
- Also networks blacklist corrupt publishers from all campaigns.
How does suspicious activity make an impact on mobile performance campaigns, short and long term?
When an Advertiser initiates a mobile performance campaign, their major focus is towards user acquisition that will result in business growth. While the advertiser spends money on acquiring users with the help of certain networks/affiliates/publishers, they expect return on the investment. With rapidly growing Mobile advertising industry in India, there are few delivery partners who get involved in suspicious activities in order to make some extra money that does impact the advertiser’s brand in a negative manner.
Short term (example) – Let’s say you go to a fast food joint and order 500 ML of fountain Pepsi, the server pours the Pepsi in the 500 ML glass along with 100 ML worth of ice (that costs almost nothing compared to Pepsi), the glass is full and top lid is shut, you end up getting 400 ML of Pepsi and lot of ice that will turn into water soon. You are happy with the full glass of diluted Pepsi but that is something you have not paid for.
Similarly, the advertiser has spent for acquiring X amount of users but gets “X (- ICE users)”, the expected ROI looks good statistically but the real amount of users that they see are not accurate, this results in loss of expected ROI by end of the month.
Long term (example) – By performing suspicious activity, few suppliers end up harming the brand in big way in long term. i.e. A certain supplier might decide to play around with the brand creative/banner that they are supposed to promote and make it more appealing (in unrealistic manner) in order to acquire more than usual users, this increases user’s expectations and in the end if those expectations are not met, the user is going to blame the brand and not the supplier, that will result in losing out on future revenue from certain users and also will drop the brand value.
It’s something like those times when you plan a perfect holiday by looking at those fancy brochures that say that you have to pay only 50% but in the end, end up paying more than you expected at first. (That is frustrating for sure!)
What role the leading MMPs are playing in order to reduce suspicious activities?
There are productive initiatives that are being taken by leading mobile measurement partners to reduce suspicious/fraudulent activities. MMP’s like TUNE, Kochava, Appsflyer, etc., are working hard towards saving money that advertisers are spending on acquiring Real users and cleaning up the funnel of suspicious activity that is constantly causing the brand lose money on ongoing basis. Since few suspicious suppliers come up with new ways to work around such fraud checks, there is always going to be some degree of suspicious activity on ongoing basis. Think of it like a new virus that is introduced every week and your anti-virus software needs to update in order to fight back and protect your system.
Also, there are certain types of suspicious activities that cannot be checked real time. This is where certain mobile measurement partners are unable to evaluate fraudulent activities, in order to keep a check on the same, its good if we perform physical checks on regular basis and compare the data against the usual trend and benchmarks.