India's Mobile Ad Fraud Issue…Probably one of the Worst in the World

What is Ad Fraud?

According to Wikipedia Ad fraud is concerned with the theory and practice of fraudulently representing online advertisement impressions, clicks, and conversions or data events in order to generate revenue. It’s a type of scam in which the perpetrator fools advertisers into paying for something that is worthless to them, such as fake traffic, take leads or misrepresented and ineffective ad placement.

As we all know, the state of digital advertising has come a long way. From the rise of mobile to the virtual reality takeover, digital advertising is advancing, however, there is one area where it’s still lacking: Fraud detection and prevention. Billions are lost to ad fraud annually. A recent survey states that as much as 37% of the respondents (agency + brands) are unaware of how.  

It has become almost must for every marketer or brand owner to aware about digital ad fraud detection so that they can take an effective step in shielding their business interest. While ad fraud is more generally associated with banner ads, video ads and in-app ads, click fraud has been associated with search marketing, mobile advertising, and conversion fraud with affiliate marketing.  

Fraudsters develop Bots and deploy it to engage with the ads leading to a massive dip in viewability. The fraud is typically carried out by creating fake ad traffic using content-scraping websites or other environments, getting bots to click on the ads, launching ads outside of a user’s view, or creating other fictitious mechanisms to deliver advertisements that are not seen by consumers. As per the Media Rating Council (MRC) standard of viewability, an ad impression is considered viewed if 50% of the ad space is seen by a ‘human’ for 1 second for a static ad, and 2 seconds for a video ad. Since ads are paid on a cost per mile impressions, the more the impressions, even if fake, the more the payment.  

Status in India

Brands and agencies investing in digital advertising appear to be losing nearly half of their investments due to various reasons, particularly fraud. New ad formats and channels such as video or mobile, apart from websites, have turned out to be a breeding ground for fraud. It’s no secret that ad fraud remains a significant and pervasive problem within the digital adverting eco-system and India is no exception. As per the study conducted by Tune, growing smartphone penetration and easy internet access in India is also witnessing growth in ad fraud - mobile advertising click fraud in India is 2.4X higher than global averages, and mobile app install fraud is 1.7X higher. Ad fraud in the Indian sub-continent is 15% which is 31.9% higher than global mobile ad fraud averages of 15%. It found that India had the 10th highest app install fraud rate, with 16.2% of installations showing some type of fraud.

Concerns about ad fraud are being raised worldwide but they also come at a time when the digital ad market in India is set for intense growth. Given India’s mobile-first nature, much of that ad spending will be on mobile channels. As more and more dollars get funneled to mobile, it stands to reason that advertisers in India will increasingly pay close attention to issues like ad fraud.

Factors responsible for the growth of ad fraud

The well-accepted fact that 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 particularly startups and e-marketers are coming up to take new market share, venture capitalists are pumping in money into these start-ups and as a result, there is a lot of money in marketers' pockets to spend. However, with this investment comes pressure to grow quickly and marketers are pressurized to move quickly and scammers are taking advantage of this situation.

The problem is largely a function of how ad networks work with each other, and with publishers. Two things create cracks for fraudsters to find and exploit: sub-publishers and re-brokering. Often, ad networks re-broker ad traffic to other ad networks or to sub-publishers. One ad network is contractually working with other ad networks. This is generally legitimate as networks provide media buying, but questionable or fraudulent traffic can more easily enter the picture.

How do we kill this problem?

Digital advertising has to be open and transparent, secure and auditable with a balanced and efficient eco-system and therefore it is imperative to have a third party traffic auditing system. However mobile ad frauds are here to stay – Digital Frauds are the smart underworld communities and they simply believe in making a quick buck. This is their career path. They obviously move faster than marketers at their job. While there are several tools available to prevent it, frauds have been institutionalized by various stakeholders making it tougher to crack – hitting genuine publishers the most. They have their own place in the entire eco-system – the advertiser wants performance, the fraudsters deliver it just like the genuine one – marketers start working with frauds in a quest to meet their KPIs. Here are a few steps that advertisers can take to protect themselves against fraudulent mobile advertising.

1. Improve budget management and work with genuine partners. Please note that big agency names don’t necessarily stand for honesty and transparency.

2. Brands should be very careful while allocating budgets to their partners, rather than seeking the lowest prices. Opting for standardized methods to buy inventory will help to achieve a better result.

3. Metrics at the bottom of the funnel include sales, sign-ups and long-term engagement with an app or service. "Those are much more challenging to fake, if not impossible.

4. Brands must adopt appropriate fraud detecting and brand safety tools.

5. Brands must use data insights and hold data-driven conversations with their ad partners and Close attention should be given to bottom-funnel metrics instead of top-funnel metrics. Metrics at the top of the funnel include clicks, views, and installs. These are easy for scammers to game.
6. Advertisers must create guidelines for partners and hold them accountable measure, learn and modify quickly to overcome a growing problem.

Special Thanks to : 

Mr. Matt Gallant, tribeOS CEO - Digital Marketer on a mission to end ad fraud

whatis.techtarget.com

thehindubusinessline.com

emarketer.com

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