Give any new business ecosystem enough time to mature and along come the frauds. With digital advertising becoming the fastest growing segment across mediums in India, pulling in an estimated ad spend of over Rs 10,000 crore in 2018 and an estimated CAGR of 30 per cent plus over the next few years, online advertisers have begun hemorrhaging cash due to online advertising scams.
A recent report by techARC pegs losses incurred by online advertisers due to frauds at a staggering $1.63 billion in 2018 alone. These losses are only set to grow as ad spending keeps increasing, the report says, going on to predict a 23 per cent increase in 2019. Media and advertising analysts say this is an extremely worrying trend since such high levels of losses to advertisers could spell serious trouble for the fledgling ecosystem.
“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,” notes Faisal Kawoosa, Founder & Chief Analyst, techARC.
One advertising firm executive who wished to remain anonymous pointed out that the scams hit at the credibility of metrics which determine the entire digital ad market. “These frauds are basically click farms which hoodwink advertisers into thinking they are getting high visibility and milk money. This makes afftected advertisers leery and has the potential to damage brands too,” the executive said.
The seriousness of the losses is already garnering attention from the top echelons of both advertisers and advertising agencies. According to Faisal, “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.” India’s advertisers seem to have been impacted particularly hard, with an outsize proportion of digital ad frauds affecting them. According to the techARC report, India-origin ad frauds comprised 8.7 per cent of all ad frauds globally in 2018.
Dealing with such scams is a particularly vexing challenge too, considering the sprawling nature of the digital ecosystem and the lack of proper standardised metrics which advertisers can rely on. Experts also say that brands have to be vigilant because of the ease with which these frauds can be perpetrated.
A large majority of these frauds in India were app-based at 85 per cent, according to the report, but websites are not safe either. “... organisations should not ignore the web platform. 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,” it said.
