SHANGHAI: As digital adspend soars and programmatic becomes significant in China, the country's long-standing problem with ad fraud presents challenges for marketers when they try to gain an honest sense of how their investments are performing.
While ad fraud is a problem for all markets, it is a particularly serious one in China, where bots and intentional cheating are frustrating marketers.
Industry practitioners recently gathered to discuss these issues at Campaign Asia-Pacific's DMA China event in Shanghai, where experts outlined the causes of the problem and some measures to combat it.
(For more, including potential solutions to ad fraud in China, read Warc's exclusive report: Overcoming ad fraud: can integrity and collaboration solve China's fraud problem?)
Delegates at the Campaign Asia event heard from Andy Fan, CEO of real-time bidding agency RTB Asia, and Ker Loon Ang, the Country Manager of Sizmek, a digital advertising management firm.
Andy Fan explained that approximately 15-20% of China's 10 billion daily impressions that are traded in ad exchanges are non-human – they are generated by bots from accidental malware as well as intentional crowdsourcing.
"The high ad fraud rate can be attributed to Chinese computers running old versions of Windows which are infected with malware and allow bots to run in the background," he said.
"A large portion of internet users are also using crowdsourcing software that generates fake traffic statistics on their sites," he added, while noting that this is being encouraged by certain segments of the industry because of conflicting interests.
Mobile fraud, in particular, is a special challenge as smartphone penetration grows in China, and the industry is witnessing a large pool of fake Android IDs and proxy servers that generate the installation of unverified apps.
Delegates were advised that digital advertisers will need to be more vigilant about monitoring ad networks, and work with third parties, to ensure the validity of their market performance data in the country.
Another problem concerns ad viewability, and Sizmek's Ker Loon Ang revealed that a full 75% of ads are never seen. He said: "51% suffered from poor viewability, and fake ads constituted 30% of the total volume."
He cited Group M in the US as an example of a media agency that had taken the bold step of asking clients to pay only for 100% viewability, and panellists agreed that China had some way to go before something similar happened there.
"If publishers had a traffic-tiering system, it would make them more accountable to the media budget," Ang suggested. "The question that operators and media agencies should ask is: how much of the resource is viewed and valuable?"
Data sourced from Warc