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Technology Featured APAC

APAC seen to incur a loss of US$56b to ad fraud amidst return of travel: report

Singapore – Digital advertising in travel in the Asia-Pacific region is seen to incur a loss of US$56b in ad fraud amidst the ongoing rollouts by national governments to resume travel, new research from digital ad verification and fraud prevention platform Trafficguard alongside Juniper Research.

The research reveals that bots make up to 80% of all invalid traffic for travel advertisers, a stark contrast to the 15% to 30% affecting other industries. A host of factors could be attributed to this phenomenon, including the loophole in the travel industry, where it has a proliferation of third party online travel agencies (OTA’s), some of which are authorised and some are not.

As airline websites and travel apps (OTA’s) are home to a host of data such as flight, pricing, booking, and discounts, bad bots can result in higher fees for OTA’s, as they make it appear as though far more people are viewing than booking flights. 

Mat Ratty, CEO at Trafficguard, said, “Where there is money to be made, there will be fraudsters. This is prevalent across all digital channels. What we do know is that the online travel market and airline categories are hugely competitive. As such, a lot of budget is spent on searches which have expensive PPC keywords.”

He added, “There’s also a lot of programmatic campaigns with tailored messaging to consumers who have shown an interest in a particular airline or destination. These channels are rife with ad fraud.”

Many travel companies will spend huge sums of money to drive consumers to download their travel applications. They will often use pay per install performance networks that are paid for each installation they drive. According to the analysis, performance networks that are being paid to drive these installations are delivering upwards of 50% invalid traffic on average, resulting in many fraudulent installations and misattribution of post install events such as flight and hotel bookings.

Matt Sutton, chief revenue officer at Trafficguard, commented, “Bearing the brunt of this will be the advertisers who are paying for traffic that will never generate any value. As time passes, ad fraud tactics will also be elevated, and it is imperative for advertisers, airlines, and OTA’s to be aware of the prevalence of ad fraud in this sector.”

He added, “Large sums of money is lost to digital ad fraud yearly, with the amount increasing each passing year. Having a proper system in place will allow you to save your ad spend, and make sure that your advertisements reach the right audiences.”

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Marketing Featured APAC

What’s NEXT: Creating a business case for ad fraud detection

Fraudulent advertising traffic could be costing you more than just lost budget. Any budget lost to fraud is a lost opportunity for engagement.

Invalid traffic is any advertising engagement that isn’t out of genuine interest in the advertised offering. Malicious invalid traffic, or ad fraud, is often difficult to detect until it’s too late, and then little can be done. As a result, it can drain a marketing budget quickly, with no reward in return.

Juniper Research’s report on the future of digital advertising found that advertisers’ total fraud losses will rise to USD $100b by 2023. This figure doesn’t include the unseen losses, which can be difficult to quantify. Advertisers lose out on budget as well as lost time, poor campaign performance, and lost opportunities for engagement.

Moving into 2022, businesses have accepted the fact that they need to develop and execute an in-depth marketing strategy to increase market share but may not be achieving maximum return-on-investment (ROI) from their digital marketing budgets. Organizations looking to maximize ROI must build a business case for ad fraud detection to get value for money in the new year and beyond.

Innovation Equals ROI

Ad fraud and the sophistication of perpetrators have evolved at a rapid pace in the last 20+ years. As budgets for online advertising have grown, so has the lucrativeness of ad fraud as a business opportunity, attracting more sophisticated players to the arena. Now ad fraud is an industry in its own right, evolving and adapting to continue to outsmart marketers. This industry will only continue to thrive as time goes on.

For businesses, it’s becoming harder and harder to add to blacklists and manage increasingly complex rule sets, without catching legitimate traffic in the crossfire. There are significant barriers to detecting ad fraud such as difficulty differentiating between a genuine and a fake click, evolving methods used by fraudsters, and a lack of industry standards against it.

Without proactive measures, the consequences of ad fraud will be exacerbated further. In addition to the wasted media spend already mentioned, fraud will inflate volume metrics, making low-quality sources appear to be high performing. The result will be advertisers unknowingly increasing investment in sources of invalid traffic, compounding losses further.

Fighting Ad Fraud

Fraud prevention will be the best way to beat these organizations in 2022. By stopping the fraud, fraudsters don’t get paid and the business of fraud is made less profitable. To build a successful business case for ad fraud detection, you have to weigh up which options work for your business.

· Blacklists

Blacklists are an important part of any ad fraud defense because they quickly identify sources that categorically don’t have human traffic such as servers. Blacklists are a very basic first step as fraudsters can easily circumvent them by changing the IP addresses of their traffic. Also, when blacklisting IPs that can have human traffic rather than isolating the fraud itself, blacklists can actually result in high volumes of false positives.

· Rule-based detection and mitigation

Rule-based mitigation involves identifying characteristics and thresholds that, when exceeded, block traffic or a traffic source. Rule-based mitigation is appropriate when you know the characteristics that define a particular fraud tactic, such as an impossibly short click to install time. However, it is near impossible to formulate rules for fraud tactics that you have never encountered before. For a rule to be created, a new fraud type must be observed at scale which means it is impacting your budget and taking up time. Rules are reactive – a new fraud type exists, then a rule is created. It is always fraud first, then rule.

· Machine learning

A subset of artificial intelligence, machine learning extracts patterns and relationships from data and expresses them as a formula that can be applied to new data sets. Over time, as the data changes, new patterns are learned by the model without the need to explicitly program them. Because of the scale of data processed, insights can be more valuable and derived much faster using machine learning than by using human analysis alone.

Machine learning can provide more thorough and efficient analysis. In fact, according to research by TrafficGuard, machine learning, by 2022, could save advertisers over $10b a year in ad spend that would have been wasted on fraud. Instead of reacting to fraud as it evolves with new rules, machine learning can be part of a proactive defense that is tactic-agnostic, more accurate, and able to stop fraud before the fraudster gets paid.

Balancing the Business Case

These key options should all be considered in a valuable business case that accurately weighs up benefits, risks, and costs. As digital transformation evolves, ad fraud will only increase in sophistication and severity, impacting advertisers’ efforts to secure a return on their advertising spend.

Ultimately, machine learning provides a win-win for organizations looking to strike a balance between effectiveness and affordability, as businesses can easily access powerful infrastructure on a scalable subscription model. As we progress into the next year, organizations must prioritize prevention, not just detection, if they are to manage the risks to marketing budgets at such a critical time for businesses. 

This article is written by Luke Taylor, chief operating officer of digital ad verification and fraud prevention, TrafficGuard.

The article is published as part of MARKETECH APAC’s thought leadership series What’s NEXT. This features marketing leaders sharing their marketing insights and predictions for the upcoming year. The series aims to equip marketers with actionable insights to future-ready their marketing strategies.

If you are a marketing leader and have insights that you’d like to share with regards to the upcoming trends and practices in marketing, please reach out to [email protected] for an opportunity to have your thought-leadership published on the platform.

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Technology Featured Global

DoubleVerify to expand fraud protection to MoPub’s programmatic exchange

Singapore – Global digital media measurement software platform DoubleVerify has announced that it is expanding its partnership with MoPub, a monetization solutions provider under Twitter, entailing DoubleVerify to expand its full fraud protection to MoPub Marketplace, which is MoPub’s programmatic exchange.

MoPub Exchange currently connects advertisers with more than two trillion ad requests from over 1.5 billion addressable users around the world.

Said expanded partnership stems from their original partnership in 2019 where DoubleVerify was the sole provider of fraud and invalid traffic detection (IVT) post-bid measurement for the MoPub Marketplace. 

This expanded partnership, which includes DoubleVerify’s pre-bid avoidance segments and post-bid monitoring and blocking, further extends quality coverage for global advertisers and publishers across one of the world’s premiere mobile app programmatic exchanges. With DoubleVerify’s technology, MoPub can continuously refine the quality of mobile inventory available through MoPub Marketplace.

“For advertising to perform, it must be seen by real people. Unfortunately, fraud follows the money — and as ad investments have shifted to mobile, bad actors are working hard to take advantage. For that reason, it’s imperative that brands have clarity into the quality of in-app inventory they buy,” said Matt McLaughlin, COO at DoubleVerify.

He also added that they are excited to expand their partnership with MoPub to promote transparency, support mobile ad quality and performance, and empower marketers to reach their consumers wherever they are.

Meanwhile, Michal Jacobsberg-Reiss, head of ecosystem Partnerships at MoPub noted that ad fraud is an industry-wide challenge, impacting publishers, advertisers and SSPs, which pushes MoPub continuously invests in keeping their Marketplace fraud-free, and having the right partnership in place is paramount for this effort.

“DoubleVerify has been a strong partner for combatting new and emerging types of ad fraud. This expanded partnership supports our comprehensive, multi-step approach to ensure MoPub Marketplace is thoroughly vetted and monitored to uphold our already stringent, high standards of traffic quality,” he said.

As part of its mobile in-app fraud solution, DoubleVerify identifies and screens the most significant types of in-app fraud, including background ad activity, hidden ads, app misrepresentation (spoofing), and measurement manipulation.

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Marketing Technology Global

Global ad fraud solutions IAS expands ‘Center of Excellence’ in India

Sydney, Australia – Global firm Integral Ad Science (IAS), which delivers ad fraud solutions to brands and publishers, has announced the expansion of its ‘Center of Excellence’ in Pune, India with a new office facility, and plans to hire top engineering talent locally. 

The IAS Center of Excellence (COE) was established in 2020 to focus on expanding the company’s engineering and operations talent and develop innovative digital ad verification technology, drive critical partner integrations, and ultimately to provide excellent customer experience support.

IAS aims to be the global benchmark when it comes to trust and transparency in digital media quality for brands, publishers, and platforms. It offers solutions in ad fraud, brand safe and suitability, contextual targeting.

IAS said that the extended office of the COE will be housed in a world-class facility, located in the heart of Pune’s IT business district. The COE and the local engineering team will be led by Mehul Desai, IAS’ country manager in India, and VP of engineering & operations

IAS further shared that the team in Pune will collaborate closely with the company’s global data science, data analytics, and product teams to drive innovation and operational excellence. IAS will continue to expand its team in Pune and will be hiring for several key roles. 

“With our Center of Excellence in India and talented local team, we’ve developed cutting-edge technology and established the latest data and analytics capabilities at IAS. We’re growing rapidly, as IAS delivers excellent digital media quality solutions for advertisers and publishers while establishing a great place for top talent to work,” said Desai. 

Desai will be reporting to Tony Lucia, IAS’ chief technology officer. 

Lucia commented, “Expanding our Center of Excellence is a key part of our global strategy to drive continued technology innovation and operational excellence at IAS, backed by the highest caliber of engineering talent. As we grow our engineering team around the world, our team in Pune brings exceptional talent, cross-collaboration, and technological expertise as we build the future of digital media quality at IAS.”

Similarly within this month, IAS has announced the appointment of Saurabh Khattar as the commercial lead for IAS India. Khattar is charged with leading sales operations of the company in India, to work with brands, agencies, publishers, and platforms in the region.

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Main Feature Technology APAC

Are online data collection platforms marketers’ best defense against ad fraud?

Digital ad fraud encompasses any activity that deliberately impedes the delivery of ads to an intended audience. Most commonly, fraudsters use bots or domain spoofing to falsely represent online advertisement impressions, clicks, and conversions. These techniques are continually evolving – most fraudsters can now effectively mimic human behavior, making it easy for them to avoid detection.

Pleasingly, overall global ad fraud declined slightly in 2020, according to Integral Ad Science’s most recent Media Quality Report. Unfortunately, the report also noted that countries in the APAC region continue to have some of the world’s worst ad fraud rates. For instance, Japan and Australia were the only countries worldwide that saw significant increases in ad fraud last year. For marketers, ad fraud remains a continuing bugbear, leading them to waste valuable digital advertising budget and miss important opportunities to connect with target audiences. So, what can they do to protect themselves?

Fighting ad fraud with online data collection platforms

The only way for brands to effectively fight fraud is to closely monitor their ads for any signs of suspicious activity. To do this, they need a way of viewing the internet from the perspective of their target audience, to basically see the internet through the eyes of their own consumers. Enter ethically sourced residential IP proxy networks. These networks enable marketers to openly surf the internet with complete transparency. In fact, they are already being used by thousands of global brands, including in the e-commerce, travel and financial services sectors – and, of course, by marketing agencies, too.

Every digital ad campaign is built around demographic targeting that is based on an individual’s online behavior. By using online points that match their target audience, marketers can test their ads and verify that they are being deployed correctly, rather than fraudulently.

But why can’t marketers simply use their own IP addresses to monitor ads? Regrettably, smart fraudsters can easily spot and identify non-consumer IP addresses originating from brands or data centers. When they know they are being monitored, they will quickly respond by showing brands false information, all the while covering their tracks, so they can continue their malicious activities undetected.

Gaining insight into the competition

In addition to employing residential IP proxy networks in the fight against fraudsters, there are two important ways in which marketers are harnessing this tool to gain unfiltered tactical insights. Firstly, using residential IP addresses to split user sessions allows marketers to accurately see all the ads that are competing for their specific target audience’s attention. This enables them to make smarter decisions when it comes to campaign planning.

Secondly, in many sectors, marketers who monitor the activities of competitor brands are now obliged to use residential IP proxy networks to see an accurate or realistic picture. This is because it’s becoming increasingly commonplace for brands to identify when they are being viewed by a possible competitor and to consequently serve them decoy content. This happens even though the web-information being viewed is publicly available and can be freely accessed by any other consumer around the world. This can have serious implications for marketing teams if, for instance, they are fed incorrect information about a competitor’s upcoming product launch, promotion, or other activation.

Globally, the use of digital advertising by brands is continuing to skyrocket, spurred on by consumer lifestyle changes caused by the COVID-19 pandemic. According to market intelligence provider Beroe Inc., global spend on digital marketing reached US$330-US$340b in 2020 – an annual growth rate of almost 13%. In this environment, revenue generation opportunities for ad fraudsters will only increase, so they won’t be disappearing anytime soon. As such, brands have no option but to take advantage of all technology at their disposal in the fight against ad fraud. Currently, leveraging residential IP proxy networks is by far the most effective tool to stop ad fraud at its core. Doing so will enable marketers to maximize their budgets by ensuring that their ads are seen by the right people, in the right places, and at the right times.

This article was written by Tamir Roter, APAC and EMEA VP of online data collection platform Bright Data.
Categories
Technology Featured East Asia

IAS comicizes ad verification awareness for JP marketers through manga series

Tokyo, Japan – Integral Ad Science (IAS), the global digital ad verification company, pushes for the awareness of ad verification by using everyone’s favorite medium – Manga comics. 

IAS launched its first Manga info book titled ‘Understanding Ad Verification with Manga!’ in an aim to raise awareness and deepen understanding of ad verification specifically for Japanese marketers, by introducing the basic concepts and approaches of ad verification.

With an even stronger digital activity today, the presence of fraudulent ads is fast becoming a pressing issue, and proper ad verification is looked to as one of the best possible solutions to combat this. Ad verification is a process that enables advertisers to verify if ads are placed in the right context, such as being situated on the right websites and therefore, displayed among the right audiences.

Digital ad verification is the company’s prime solution. The specially crafted manga series by IAS is an easy-to-understand overview of the basic concepts of ad verification, solutions, and use cases, seeking to support those in the field of digital advertising, as well as those at companies and agencies who are working to optimize and improve the health of their advertising.

It centers around the main character, Rinosuke Adobe, a young digital advertising manager at a fictional automobile manufacturer, and his team member, Tsugumi Suehiro, and their journey in solving problems such as brand risk and ad fraud by using ad verification.

“Although awareness of ad verification as a solution to media quality issues such as brand safety, ad fraud, and viewability in the digital advertising ecosystem is growing in the Japanese market, efforts to understand and implement the solution are still in their early stage,” said IAS.

Takeshi Yamaguchi, IAS Japan’s sales director, said, “Japanese digital ad budgets continued to grow even throughout the challenges of H2 2020, while ad fraud rates have also increased. IAS created this manga comic book to help creatively communicate the importance of ad verification and present the verification solutions in an easy-to-understand format for our partners.”

The new manga booklet is available for free download on the IAS website.

Japan has been bolstering its efforts on creating a safe environment for ad publication. The country has launched the Japan Institute for Certification of Digital Advertising Quality (JICDAQ), a third-party organization that provides third-party certification of the quality of digital advertising. Aside from this, a report by the Cabinet Office’s Digital Market Competition Council has also been released that outlines issues and recommendations for ensuring the fairness of transactions and improving transparency for the sound development of digital advertising.

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Technology Featured Global

Video ad solutions Aniview team up with White Ops in providing ad inventory protection

Singapore – Video advertising solutions Aniview has partnered with global cybersecurity company White Ops to protect its client’s ad inventory through White Ops’ ad verification feature.

Through the partnership, Aniview will integrate the White Ops Advertising Integrity solution to help optimize protection and ensure its customers’ safety from malicious and sophisticated cybersecurity risks. As a result, publishers and advertising networks have another avenue by which they can access White Ops protection for their inventory. 

Furthermore, Aniview and its customers can leverage White Ops’ privacy-sensitive detection technology to identify threats and automated fraud attempts, ensuring their advertising inventory can be trusted and fraud-free. This then allows Aniview to provide its clients an effective solution to identify and prevent malicious video-bot traffic. The partnership represents the next step in Aniview’s mission to provide verified traffic and protection against video ad fraud. 

“The most common types of video fraud occur when malicious fraudsters misrepresent their display units as video inventory in programmatic exchanges. These sophisticated bots are deployed through malware embedded in software, essentially performing device-hijacking on a mass, organized scale. With the significant dangers ad fraud poses to the video supply chain, safety has become an increasingly critical issue and, as such, dangers are being met with innovative solutions,” White Ops said in a press statement.

White Ops operates two key features for video advertisers to use: White Ops Advertising Integrity, where platforms can tap into comprehensive pre-bid prevention and post-bid detection capabilities to verify the validity of advertising efforts across all channels, and the White Ops Fraud Mitigation Platform, which spots and stop sophisticated bots and fraud by using technical evidence, continuous adaptation, machine learning, and threat intelligence. 

“We’re excited to join together with Aniview in the optimization of fraud-free video advertising solutions. This partnership strengthens our presence in digital video while providing easier access to our platform for publishers and networks. The more partners that we have in this fight, the bigger our knowledge base grows and the better we can optimize our tactics against potential new threats from bad actors,” said Ellie Windle, vice president, global strategic partnerships and alliances at White Ops.

Meanwhile, Roy Cohen, CTO of Aniview commented that the recent partnership with White Ops responds to the greater need for protection against ad fraud as online video content is booming.

“Working with White Ops and our internal fraud detection tools, we will develop greater application integrity by identifying and blocking bot traffic with the highest degree of accuracy and speed to stay ahead of adversaries,” Cohen added.

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Main Feature Technology Global

The case for upgrading fraud detection online

The rapid acceleration of e-commerce during the pandemic has created a perfect storm for fraud detection. There are more people online, more new people online, and money is coming from new places. All of these factors can make traditional fraud detection prone to false positives and false negatives, even if the actual rate of real fraud doesn’t change, leading to a rise in fraud cases. During the circuit breaker period in Singapore, for example, the Singapore Police Force reported that they received at least 1,175 reports of social media impersonation scams in the first six months of 2020, compared to only 83 cases during the same period in 2019

When there is a surge in new data, old data is often not enough to evaluate and authenticate identity accurately. While traditional data sets are still a vital piece of any fraud prevention approach, companies should also look to fill in newly created gaps with more real-time, predictive and intent-based options.

New scenarios that aren’t accounted for

Many traditional models are based on behavior patterns that have been completely and perhaps permanently disrupted by COVID-19. Many methods of fraud detection rely on aggregated data from past behaviors. These methods usually follow two models. Organizations establish their own risk thresholds and structure their analysis around that, or they rely on machine learning to establish a new baseline of individualized behaviors that they would deem normal. 

However, these methods can no longer work in the new normal. First, an organisation’s risk thresholds must be adaptable as new customers stream in and current customers change their habits. Additionally, machine learning models are less reliable because the baseline is not as stable as it used to be.

According to a study by Facebook and consulting firm Bain & Company, online retail penetration has expanded across all categories, seeing at least a 1.4 times increase from 2019 to 2020. Increase in the groceries category nearly tripled, achieving a 2.7 times growth as more people shopped online due to the pandemic. Bulk purchases and purchases of unusual items that fall outside of typical buyer profiles have become more common, and people are also using new technologies to transact such as Google Pay, PayPal and Apple Pay. Many countries in Asia like Singapore and Japan have also been receiving government aid, thus making spending still possible from new sources.

When people stop behaving the way they usually behave, fraud detection can be significantly impacted. New customers may be flagged as fraudulent, while fraudsters might go undetected due to a surge in unusual activity that obscures their fraudulent deeds. 

Here are three best practices for upgrading fraud detection online.

1. Detect Fraud with the Right Data

With an increasingly crowded online marketplace due to new customers and new activities, one source might not be enough to determine if the activity is real or fraudulent. Companies should beef up on data that proves details like customer behaviour, location, and spending are accurate. For example, someone might have an official residence in Tokyo, but may be spending time in Osaka during the pandemic. A person may have decided to travel for the first time in several months after having been sheltered for some time. These are very real behaviours that would look suspicious to fraud detection systems based on older or more static data. 

Companies should find data that can help prove or disprove assertions about an individual. Some data partners offer verification of location by mobile phone, for example, or share recent online spending habits or home rental information. If someone has looked for houses for rent in a certain area, they may end up purchasing items and sending them to their new rental address. 

At the same time, companies shouldn’t rely too heavily on trend data for forecasting. Probabilistic modelling is most accurate in a stable environment, where past data is likely to predict future behaviour. As trends as recent as March are no longer relevant, companies need to forecast using new types of data. People might now be unemployed, shifted houses, started  ordering more meals online, or taken up new hobbies. With old probabilistic models, all of these factors would be flagged.

Intent-based data solves this problem with more real-time information such as recent search data. Intent data doesn’t care about past averages or norms, rather it is directly reflecting real behaviour that would either support or contradict current behaviour being evaluated. If someone spends time searching for car rental options for a weekend drive, that context can help predict additional related purchases that may otherwise seem anomalous. Or, it could flag a purchase in a specific location that doesn’t match with their intended use.

2. Update Outdated Rules

Identities associated with private VPNs have often been flagged. With remote work or hybrid work situations becoming a permanent trend in Asia Pacific, it’s no surprise that people are turning to making connections online and having to share computers at home. They may increase their use of different browsers or a private VPN. Or if they’re concerned about fraud, they may use a VPN to obscure their location. 

Meanwhile, with many seniors now banking and shopping online for the first time, simple identity verifications that have long been put in place like log-in page timeouts, CAPTCHAs and setting strong passwords are major hurdles to winning new customers. It’s better to find authentication options that rely on other data that can work in the background, and allow for simpler processes.

3. Keep An Eye on the Future

Many companies are creating innovative solutions to help keep people safe online, while also making it easier for them to transact and move freely. Rather than keeping different passwords and security questions handy, people should be able to be trusted to be who they say they are online, just like they are offline. This only happens when privacy-compliant data works together to offer the same level of trust and efficiency as a driver’s licence or a passport would offline.

Self-sovereign identity is one innovation, based on blockchain technology, that could dramatically improve fraud detection and customer experience. It would allow people to manage their own digital identity in a safe way and share it with companies they transact with as needed. 

Similarly, data consortiums that safely combine insights to create a bigger, more accurate picture of customer behaviour can help boost confidence and reduce the need for cumbersome hurdles such as log-ins and the like.

What COVID-19 has shown is that digital behavior is still evolving. Many industries saw three to five years of forecasted growth in only a few months. Industries like telemedicine and online grocery shopping will need to move quickly to secure their own businesses as they deal with new adoption just as many long-standing online businesses will need to make updates. Creating a fraud detection strategy that takes advantage of new innovations is the key to success.

The author is Nguyen Nguyen, Vice President, Partner Development & Technical Services of ADARA. ADARA is a permissioned data and verified identity tech company that provides internet marketing services, including digital marketing, programmatic advertising, search, identity and verification, or stopping fraud.

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Technology Featured APAC

APAC sees surge on ad fraud cases in 2020: report

Singapore – The Asia Pacific region is seeing a surge on ad fraud cases this year, as fraudsters are increasingly faking organic metrics, a new report from app marketing platform Adjust shows.

From a general perspective, fraud rates in August this year have increased by 214.86%, compared to statistics recorded last year.

East Asian countries of China and Japan clocked a 65.6% and 60.7% rise respectively, with fake users or online bots emerging as the most prevalent type of fraud in their jurisdictions.

“It is absolutely vital that marketers can trust their data. Without having a clear view, it is simply impossible to make strategic, data-driven decisions. Ultimately, fraud is and will remain to be a challenge we see in the industry, however by implementing the right tools, we will be able to stay one step ahead of the fraudsters and ensure transparency remains a top priority,” says Andreas Naumann, director of fraud prevention at Adjust

A closer look into the Southeast Asian region reveals that 39.11% of the fraud was from software development kit (SDK) spoofing, and 18.95% of them were created by fake bots. By context, SDK spoofing is defined as the creation of legitimate installs of a certain software/app to consume the advertiser’s budget.

“It’s crucial that marketers implement solutions such as Adjust’s free-to-use SDK Signature, which combats this fraud scheme. The reality is that fraud prevention solutions are the only sure way to eliminate fraud, which is why in 2016, Adjust launched the first ad fraud prevention filters in the market and spearheaded the industry-wide movement against fraud,” stated April Tayson, regional vice president for Adjust India and Southeast Asia 

In a statement provided to MARKETECH APAC, Tayson notes that with the approach of the holidays, advertisers need to see the balance of spending ‘big’ on their advertising budget, and the actual data they gathered from customer analytics and attribution.

April Tayson, VP for India & SEA Headshot
April Tayson, Regional Vice President for Adjust India and Southeast Asia

“There are plenty of other best practices well worth incorporating into your Christmas marketing strategy, such as increasing your retargeting spend. By targeting users who have shown interest in your products, retargeting campaigns can be extremely effective when combined with attractive limited-time offers. A discount may be the deciding factor for users who have already clicked on a product page or abandoned their cart,” Tayson stated.

She also added, “Marketers should also be optimizing every step in the conversion funnel to ensure customers have a seamless user experience during the sales period. If a portion of customers are getting stuck in the user funnel, this will prevent you from optimizing your revenue. This is an important step throughout the entire year, but increased revenue opportunities during the holiday season make it a critical step at this time of year.”

Furthermore, Tayson stated that for companies strategizing their plans for 2021, brands would need to focus on both sides of their advertising strategy: saving advertising budget from fraud attacks and prevention of future frauds, not just detection.

Organic VS Paid Reject Installs
An infographic showing the comparison of rejected install statistics between organic and paid advertising campaigns (Courtesy of Adjust)

“Using fraud prevention filters is the only way to stop fraud in its tracks, helping you save your UA budget and keeping your data sets clean and reliable. From there, you’ll be able to acquire better and more valuable users while identifying your best-performing channels. It’s also important your fraud prevention filters are based on prevention and not just detection. Proactive fraud detection means this fraudulent traffic is cut off at the source, and you avoid having to trawl through your data to find the fraudulent installs and deal with chargebacks,” Tayson concluded.

Categories
Technology Featured Southeast Asia

The ripples effects of ad fraud

According to the Research and Market Report, Southeast Asia digital advertising market is expected to grow by 13.93% and reach $15.35 billion by 2026, representing the fastest growing regional market in the world. But ad fraud remains a major challenge in the sector — even among social apps. In fact, in 2019, Adjust found that around 11% of all social installs were fraudulent. 

Despite all its challenges, 2020 is undeniably proving to be a year of growth, but that can easily be undermined by ad fraud. Fast-growing regions like Southeast Asia can be especially attractive to fraudsters, as fraud prevention tools aren’t as commonplace. The losses aren’t just monetary — fraud also skews the accuracy of datasets, drives bad user acquisition decisions, and hides the best-performing channels. To make the most of 2020’s opportunities, fraud prevention needs to remain a key priority for growth marketers. 

So how do we prevent fraud? First, we have to understand it.

Ad fraud, simplified 

Mobile ad fraud describes the actions that fraudsters take to siphon off advertisers’ budgets by exploiting mobile advertising technology. Fraudsters use four main methods to commit their crimes: Click Injection, SDK Spoofing, Click Spam and Fake Users. Ultimately, you can distinguish between two types of fraud — those that spoof ad engagements (like views or clicks) and those that spoof app activities (like installs, sessions and events). The former is known as Spoofed Attribution. The latter is called Spoofed Users.

Fraudsters are also incredibly resourceful, and once they realize fraud filters are blocking a certain type of fraud, they will try and find a workaround or move on to those that are not protected. 

But the ripple effects of fraud, the ones which aren’t talked about, are how marketers are affected by fraud-filled datasets which influence their marketing decisions. 

What fraud means for your metrics 

Ad fraud doesn’t just steal from advertising budgets — it also interferes with user acquisition decisions. 

For instance, a partner might look like it’s bringing tons of new installs, but there’s a chance these attributions are fraudulent. If marketers can’t tell the difference between fake and real users, they’re likely to spend more money with the networks that appear to be yielding more or better users — effectively opening themselves up to further fraud. Marketers get caught in a feedback loop, directing money away from those sources that bring them real, high-quality users.

We also haven’t considered the domino effect fake users have on in-app activity and purchase data. Some marketers may not be too concerned about fake installs: in some instances, they may even view it as a good thing as their user acquisition numbers look great on paper. But other valuable metrics, such as retention and lifetime value, won’t match up, and that’ll become a serious problem down the line. 

Dishonest industry players could also attempt to poach organics by using Click Spam and Click Injection methods. The table below shows an example of the extent to which these methods of fraud could be affecting your metrics — just take a look at the difference in returns and ROI.

While most ad networks are reputable and have their clients’ best interest in mind, sources further down the chain may be taking advantage of advertisers without the network’s knowledge. In an ideal, fraud-free world, a marketer could be working with a network that brings them 500 installs at a CPI of $5, the total profit of which could stand at $1,000. Alongside this, they may also gain 1,000 organic installs, from which they profit $10,000. That’s a pretty considerable ROI.

But let’s say the network now brings 800 installs at a CPI of $5. That’s a big increase, which looks great at first glance. At the same time, the number of organic installs drops to 700. While it’s not impossible, it’s more likely that this particular source of traffic is using Click Spam or Click Injection to poach organic users and users from other networks in order to pass them off as their own. Marketers waste their budgets on paying for them, and their ROI drops significantly. 

What’s the solution to ad fraud? 

While the industry may never be able to get rid of ad fraud completely, there are many approaches marketers can take to protect themselves. The most important step is understanding the problem, and then taking fraud seriously. Set up a clear process and internal point person to handle the issue. Growth marketers are in the perfect position to look at the numbers, see where they don’t add up, and then escalate the issue. 

It’s also important to work with your partners towards transparency, so that you know where exactly your ads are displayed. Fraudsters thrive off black-box models, so mobile marketers need to evaluate who they partner with and ask them how they’re fighting ad fraud. 

Ad fraud evolves fast, so stay educated. By joining summits and workshops, keeping up to date with the news, and opening up the conversation with networks and MMPs, UA managers can gain a better understanding of potential new threats and solutions. After all, bringing better education and awareness of the issue can help flush out fraudsters and keep your mobile marketing activities on track. 

The author is April Tayson, Director, Southeast Asia at Adjust. Adjust is a global app marketing platform. Born at the heart of the mobile app economy and grown out of a passion for technology, the company now has 16 offices around the world.

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