Digital advertising fraud ecosystem stirs up a $1.63-billion scam

Online deception threatens to jeopardise the digital transformation journey of brands, says a new report on ad frauds in India

At nearly nine per cent of the global bad ads business, India’s digital ad fraud ecosystem is thriving. It is a scam worth $1.63 billion at present and the numbers are likely to go up by 23 per cent in 2019 according to techARC Research, a firm that tracks digital advertising in the country. 

According to the company’s ‘India digital ad-fraud market report’ the problem is particularly rampant in the domains of banking and fintech, entertainment and gaming (especially video based) and healthcare and pharmaceuticals where the focus is on acquiring new customers.

Faisal Kawoosa, founder and chief analyst, techARC noted that digital ad-fraud is getting increased attention from the C-level leadership of evolved organisations, where it is no longer an agenda of a CDO or CMO alone. “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,” he added. 

Online deception comes in many forms; apart from the now-familiar track of generating fake likes and comments on advertising, publishers and websites have an array of tools at their disposal (see box). The misguided leads originate from publishers or websites who are keen on gaining ad spends but do not have the viewership to justify the same.

Kawoosa noted that digital commerce or online shopping companies are more likely offenders as they are in a mature phase and want to focus more on user engagement, rather than acquisition, which has sharper quantitative indicators. However experts said that blame must also be equally apportioned to marketing professionals in ad agencies and companies that turn a blind eye towards patently false metrics, in their rush to meet targets and justify high digital spends. 

The rise of the dark side of digital has also spawned a wide set of tools to monitor the same. Nishad Ramachandran, chief digital officer, Hansa Cequity, a digital marketing company said, “We are seeing a lot of ad-tech companies and technology players come up with tools to help deliver high quality ad impressions. Stopping ad fraud is a cat and mouse game. The moment a new technology comes in to prevent a type of fraud, the fraudsters start finding workarounds around these toolsets to continue to gain their share from online ad spends.”

Bad ads are a global problem. Google took down 2.3 billion ads that violated its advertising policies, banning six million bad ads every day, in 2018. Speaking soon after the release of the Bad Ads Report 2018, Director of Sustainable Ads at Google, Scott Spencer said, “Our ads are meant to connect users with relevant businesses, products and services; but bad ads ruin the experience. We have been working towards protecting the users, advertisers and publishers by investing significant technological resources.”

In 2018, Google said it identified and terminated almost one million bad advertiser accounts, nearly double the amount that were terminated in 2017. Nearly 734,000 publishers and app developers were terminated from the Google ad network and it also took off of nearly 28 million pages that violated the publisher policies. Advertisers must be alert and Ramachandran said they could seek help from Google’s ad traffic quality program that uses technology and human moderators or Oracle’s Grapeshot and Adobe adopting WhiteOps to save valuable ad dollars.