NativeX: Combatting Advertising Fraud in APAC

Fraud continues to increase in the Asia-Pacific region. Knowing this, advertisers and publishers must take steps to avoid fraudulent activity. To do this, we must look closer at the epidemic.

Everyone knows that mobile devices are now our daily, faithful friends. We carry them with us everywhere we go and tend to log onto our device the minute our eyes crack open in the morning. We can’t live without knowing what’s happening in the world each morning. As we message our friends and family, play our favorite games and shop in our pajamas, the time is limitless. At the end of the day, when we run out of games to play and people to talk to, we can always fall back on scrolling through social media for some entertainment.

As we increase our time on our mobile devices, it seems fitting that the ad budgets for mobile continue to grow as well. We want to capitalize on eager shoppers looking to fulfill their needs. Statistics forecast that mobile advertising will only continue to gain more momentum through 2021.

This increase in the industry attracts more than just revenue. It also brings all the tricksters, fraudsters and schemers to the market. They are lurking at every corner, hiding behind the mobile advertising space. Many of these illegal activities turn out to be theft through fraudulent mobile advertising.

As you examine the APAC region, you see that mobile fraud led to $34 billion of advertising losses during 2018. TrafficGuard, an expert in ad fraud, estimates that number will move closer to $56 billion by the time we reach 2022. That’s an insane amount of money and shows us that we are facing an epidemic. We must focus more on security for both the developers in the industry and also consumers affected by fraud.

NativeX - Mobile Ad Fraud Risk Factor Assessment

To take the next steps, we must ask some hard questions. We have to first dig up the true cause of this increase. Then, we have to figure out how publishers and advertisers can prevent further scams from occurring. Let’s take a closer look.

Looking Closely at APAC Ad Fraud

Looking deeper at the APAC region’s ad fraud reveals more information than ever before about this epidemic.

TrafficGuard did a specific report that studied the impact of this fraud in many countries. This included Malaysia, Thailand, South Korea, Indonesia, Japan, India, the Philippines, Australia, China and Singapore. They looked at how the fraud was carried out and the result of each instance for the country.

TrafficGuard reports that in 2018, one out of each thirteen app installs in the APAC region wasn’t done by genuine users. This is a staggering statistic and proves that fraudulent activity is rampant. Because scammers use intricate and advanced techniques to fly under the radar, they evade even the most sophisticated attribution platforms. In the end, there is virtually no consequence to the scammers and the companies remain the victim to the abundant losses brought forth by this activity.

What’s most interesting is that fraudulent activity doesn’t affect the area uniformly. So where is the most prevalent area of operation? Right now, studies prove that ad fraud remains highest in China, with no relief in sight. By 2022, TrafficGuard predicts that Chinese publishers and advertisers will face losses up to $19 billion. This setback challenges all the hardworking advertisers that are attempting to make a spot for themselves.

Further data proves that this fraud is higher in regions where screen time is increased during app usage. On average, this amounts to three to five hours each day. With the increased app usage, users in these regions become more susceptible to advertising fraud. Of course, China is again one of the highest rated fraud territories. Following them are Japan, Indonesia, Australia and South Korea. Each of these areas remains susceptible to ad fraud at the highest levels because the users spend more time on apps.

TrafficGuard also reports that these schemers are changing their focus to countries where smartphone growth is at its highest. You might wonder why this is the case. Simply put, fraudsters know there’s an opportunity in these areas to exploit the rapidly-growing market before there are digital defenses set up to defend the victims.

What does this mean for advertisers looking to target the high growth area as well? An advertiser that runs a $10 million campaign without the use of detection software will end up forfeiting about $2.6 million of the funds due to fraudulent activities.

Ad Fraud Mitigation Strategy

Because these high payouts continue to entice scammers, they have no reason to stop targeting APAC markets. This continues to pose a serious risk for publishers and advertisers in the area. As these hotspots continue to endure fraudulent activity, losses continue to grow as well. If detection measures aren’t taken, there’s no hope of discouraging and detecting schemers.

Alleviating Ad Fraud Impact

It’s difficult to end advertising fraud entirely, if not completely impossible. As scammers continue to gain more devices and sophisticated technology, the obstacles standing in our way are monumental. Still, even though we can’t eradicate ad fraud in the APAC region, it is possible to mitigate the epidemic. Prevention systems and solutions are in place that will enable our efforts.

The first suggestion is to utilize multi-point fraud prevention. This immediately detects any spending that appears to be fraudulent before the money ever changes hands. This system provides real-time blocking of fraud before the expenses get allocated to the scammer. By stopping the fraud opportunity at this level, advertisers have a huge advantage. The real-time indicator analyzes each transaction and blocks any invalid traffic immediately upon detection. Not only does this protect people from becoming a victim, but it also increases performance through accurate and useful metrics.

What are some other methods that can be used to reduce exposure to fraud? To start, advertisers must choose their partners carefully. It’s vital to always work with an entity that’s trusted if you want to combat fraud. While working in the APAC region, advertisers must limit liability. This starts by trusting the circle of partners, defining how many people the company works with and implementing anti-fraud programs.

Next, companies must generate systems to measure the action in real time. If you’ve been exposed to fraud previously, you might consider switching from pay-per-click to conversion purchases instead to decrease your risk. Consider the benefit of working with a third-party ad verification audit service to ensure you only pay for ads that are displayed. By doing this, companies guarantee that the money spent on advertising brings positive outcomes.

Another crucial step is to look for AI tech advances to battle fraudsters as they attempt to scam the system. AI is becoming a key component in fighting ad fraud. If we want to stop them from taking over, advertisers need to be willing to use AI as a resource for analyzing data and detecting activity as it occurs. AI is capable of scanning millions of interactions at once. This allows AI to deter and prevent illegal activity before it begins.

Machine Learning Mobile Ad Fraud

As the multi-point detection technology continues to evolve, machines help us to take on this global fraud on a larger scale. Developers and advertisers in the APAC area benefit from increasing network security and using these technological advances to prevent fraud. Over time, all these efforts will decrease the opportunity scammers have to capitalize on the industry.

Creating a Brighter Future in APAC

Will we ever be able to eradicate ad fraud in APAC? Nothing is confirming that we can guarantee a positive outcome. With that said, technology allows us to take preventative measures that begin to put a considerable dent in the fraud. For this lofty goal to be accomplished, all companies in the region need to join together to launch an attack on a massive scale.

There’s no question that fraud is an epidemic of major proportion. It’s expensive for companies and only continues to grow. That’s why we must do more than just report the fraud, but also take steps to prevent this from happening in the first place. By blocking invalid traffic and reading real-time data, advertisers protect their investments.

If we don’t take steps to protect the companies in the APAC region, we face defeat. It’s time to unite our advertising forces with sophisticated technology and detection software to expose fraud for what it is. We can battle this in the APAC region and worldwide, as long as we work together. By being proactive, we ensure future ad security and stability for our companies in the years to come.

Learn about mobile ad-fraud in APAC and more about NativeX’s anti-fraud solution on their website