Indias Mobile Ad Fraud Problem is One of The Worst In The World

It’s no secret that ad fraud remains a significant and pervasive problem within the digital advertising ecosystem. New data from Tune reveals that India is no exception.

Top 20 Countries, Ranked by Mobile App Install Fraud* Rate, March 2017 (% of total analyzed by Tune)

Tune’s researchers studied more than 24.3 billion ad clicks on 702 mobile ad networks scattered around the globe. The firm reports that about 15% of mobile ad clicks across all of those networks were fraudulent.

But when Tune narrowed its scope to India, it found the country’s fraudulent click rate was significantly higher than the global figure, at nearly 32%.

India’s mobile app install fraud rate was also comparatively high, by Tune’s accounting. In March, the firm analyzed about 437 million app installs that took place in 131 different countries. It found that India had the 10th highest app install fraud rate, with 16.2% of installations showing some type of fraud.

That level of mobile app ad fraud is even more significant given that residents of India downloaded more apps to Android devices than those of any other country in the world in 2016, according to App Annie. The research firm reported that Google Play logged 6.2 billion app downloads in India last year, surpassing the US’s download volume on the app store for the first time.

Concerns about ad fraud are being raised worldwide, to be sure, but they also come at a time when the digital ad market in India is set for intense growth. eMarketer expects that digital ad spending will more than double between 2017 and 2021, growing from $1.21 billion to $2.80 billion. That means the annual growth rate will remain well into the double digits for the entirety of our forecast period.

Given India’s mobile-first nature, much of that ad spending will be on mobile channels. eMarketer projects that more than half of all digital ad spend in India will be dedicated to mobile for the first time next year.

By 2021, more than six of every 10 dollars spent on digital advertising will go toward mobile devices. As more and more dollars get funneled to mobile, it stands to reason that advertisers in India will increasingly pay close attention to issues like ad fraud.

Tune noted that India’s tech startup sector has been growing at a blistering rate. And as new companies attempt to scale quickly, they’ve used less than ideal models for monetizing. Tune reports that legitimate ad networks can be overwhelmed by ad buys, leading them to access so-called subpublishers to meet demand.

The use of subpublishers introduces a layer of complexity and opaqueness that makes it harder for ad buyers to ensure their ads are going to the right places—something fraudsters have quickly taken advantage of.

But India is by no means alone in facing the problem of ad fraud. In May, the Association of National Advertisers (ANA) released a report estimating that ad fraud from bots would be responsible for economic losses totaling $6.5 billion worldwide this year. The good news was that the figure represented a 10% drop from the $7.2 billion in losses the ANA predicted for 2016.

The ANA noted that the decline in automated ad fraud was the result of improved detection methods, but also cautioned that ad fraud bots were getting “more sophisticated and evasive” as a result.

—Rahul Chadha

Source: eMarketer