The era of digitisation or digital fraud?

One-tenth of world's digital ad frauds happen in India


March 15, 2019

/ By / Kolkata

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Digital commerce contributed to more than half of the total ad-fraud in India

It is estimated that ad frauds will grow at 23 pc in 2019 due to the “sophisticated techniques being employed by fraudsters attracting higher payouts”.

The more tech savvy India is becoming, the more it is costing for digital advertisers. According to a report by market research firm techARC, the total size of digital ad-fraud in India stood at staggering USD 1.63 billion, which is 8.7 pc of the global size.

The report titled “India digital ad-fraud market” said, digital commerce contributed to more than half (51 pc) of the total ad-fraud in India, followed by leisure and travel at 26 pc; entertainment and gaming at 13 pc; banking and finance at 8 pc; healthcare and pharma at 1 pc.

The digital commerce is facing more cases of frauds as agencies tend to fake the “engagement as well as retention” of customers on a site, whereas in more budding digital domains—banking, entertainment, gaming and pharma—the clients are tricked into believing they have acquired more customers than actual, the report noted.

“The impact of digital ad fraud now goes beyond diminishing the returns on marketing spends and can jeopardise the entire digital transformation journey, hampering brand equity, relevance, and positioning, among other ramifications,” said Faisal Kawoosa, founder and chief analyst of techARC.

Pegged at USD 8.76 billion in 2018, the Indian advertising market is estimated to grow with a CAGR of 10.62 pc till 2021, to reach a market size of USD 12.06 billion. Digital advertising is set to grow at 31.96 pc CAGR, with the market set to expand to USD 3.52 billion, according to the Dentsu Aegis Network Digital Report 2019. As of 2018, the size of the digital advertising market was around USD 1.3 billion and is expected to contribute 29 pc of the ad market size by 2021.

If one takes a look at the global business, digital advertising in 2018 topped out at around USD 111.14 billion and by 2019 it will account for 55 pc of all media ad spend. Out of this, 13 pc of all money spent on digital ads was vacuumed up by fraudulent websites and bots in 2018.

Digital ad frauds happen when agencies use a wide range of tactics such as invisible ads, using bots and fake users, inflate the impact of a campaign, hijacking ad slots and charging advertisers unjustified fees.

Digital ad frauds

Mobile apps account for 85 pc of the total digital ad-fraud from India, making it the biggest contributor to digital ad frauds. In 2017 alone, mobile ad fraud robbed Indian marketers of USD 350 million. However, websites are also not safe with threats like fake leads and keyword abuse. “Web platforms are more susceptible to frauds as in several organisations, the digital teams are primarily focusing on the app leaving the web space vulnerable,” TechARC warns.

With the growing popularity of videos, they are becoming increasingly the preferred medium of content, while attracting fraudsters to explore sophisticated fraud techniques to earn more on the premium advertising channel.  This is increasingly putting the brands at harm for brand safety as well as relevance, noted the report. It estimates the ad frauds to grow at 23 pc in 2019 due to the “sophisticated techniques being employed by fraudsters attracting higher payouts”.

Last year in October, Google averted an ad fraud network that was using botnets to fool advertisers, after buying 125 legitimate apps listed on Google Play Store and then using botnets to keep up the appearance of a thriving app with a growing user base.

In need of a solid solution

As per a recent report by EY, advertisers in India have already shifted spends to digital, which contributed to 17 pc to the total advertising budget in 2017. This is expected to grow to 22 pc by 2020.

In its annual Bad Ads report, Google announced that it has banned 2.3 billion misleading ads that violated its advertising policies in 2018. The company also identified and terminated almost one million bad advertiser accounts, which is nearly double the amount that were terminated in 2017.

Nearly 734,000 publishers and app developers were terminated from the Google ad network and ads were completely removed from nearly 1.5 million apps and nearly 28 million pages that violated the publisher policies, the company said in a statement. IndiGo airlines in mid-2018 ran counter-campaigns on social media when fake ads promoted job vacancies and free tickets.

“Businesses who have an ad-fraud solution in place are better equipped to have higher levels of customer engagements. This is because they are able to contain abuse through their brand and serve only the most relevant things to their customers,” techARC’s report said.

“There is a need for digital brands as well as the traditional business model marketers to develop comprehensive O2O ad-fraud strategy as businesses continue to dilute their single channel positioning to omni-channel brands,” the report added.

Google has said that they have introduced 31 new ads policies to address areas such as third-party tech support, ticket resellers, cryptocurrency, as well as local services such as garage door repairmen, bail bonds and rehab facilities. The tech giant said it will also soon roll out a new Policy Manager in Google Ads that will provide tips to advertisers on common policy mistakes and make it easier to create and launch compliant ads.

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