It has been estimated that up to 40% of China’s $27 billion advertising industry is thwarted by ad fraud. It is important for foreign businesses and international brands to understand the issues and pitfalls in China order to avoid this.
Data from Admaster showed Chinese fraud rates ranging from 20%-40%. By comparison, Integral Ad Science generally puts ad fraud rates in the single digits for other major markets.
China’s online sphere has developed rapidly, under very different conditions and has become a very different proposition. Experts are still grappling to understand the nature of this ever-changing market place, demonstrated by issues such as this.
What is ad fraud?
Ad fraud, or ‘click fraud’ occurs on the internet in PPC (pay per click) online marketing campaigns. Fraud occurs when a person, automated script or computer program imitates a legitimate user of a web browser, clicking on paid ad link without having actual interest in the target of the ad’s link.
It also consists of ad placement in the wrong title (most commonly a problem with digital video) and ads not appearing via paid links.
A bespoke approach to ad fraud detection
Niall Hogan, managing director of Integral Ad Science in South East Asia, said: “China requires a completely bespoke approach for ad fraud detection”. China has a unique internet infrastructure, it’s therefore difficult for people in the industry to gain a complete understanding of the scope and depth of ad fraud, including the scale and the process of how it is happening.
He added that; “Verification and anti-fraud companies like ourselves, have only recently started to look at China as a market place, we recognize we need to adapt our approach to address the unique challenge of ad fraud in China”.
An intelligent approach to reliable analytics and metrics is required
This is not abnormal practice around the globe, the real issue is rates are seemingly much higher in China and need to be taken into account when developing reliable advertising campaign analysis and metrics. Misleading marketing information will paint a false picture of the results of an advertising campaign, it is of vital importance to obtain the most accurate reports for any campaign as projects develop and move forward. A key part of this is selecting the most effective and appropriate methodology as well as targeting such ad fraud.
What is creating the problem?
The key problem in China is the power of publishers and a lack of regulation, as well as a culture of forging deals based from existing relationships. In China this is known as “Guanxi”.
Publishers have had greater strength and influence with less regulation and pressure to change, so concede less third party tracking or audit of their activities.
As awareness of this issue grows amongst agencies, marketers and businesses pressure is increasing to allow more third party, quality auditing on PPC and paid ad campaigns.
A holistic solution to the problem
Humphrey Ho, managing director of US at Hylink, said: “The Chinese IAB and CMRC are actively addressing these issues”. It is important to address ad fraud collectively because it is costing not only advertisers money but also advertising agencies too.
The effects are dissatisfied clients, extensive human costs to monitor and enforce media buy agreements, and poor customer experiences. For the on-going profitability and continued investment in the digital ad market in China it is important to clamp down on bad practice.
There needs to be a comprehensive effort by brands, agencies and publishers to reduce ad fraud on their platforms through increased third party auditing, better feedback loops and an increase in wider industry standards throughout China.
Paid Advertising supports natural search result optimization
It should not dissuade businesses from paid advertising links, they are indeed vital to a campaign but one should be suspicious if a whole strategy revolves around such an approach. Paid ad links back up and support continued SEO (search engine optimization) efforts to improve rankings in the natural results, this produces the most sustainable and long term return on investment as the highest quality, professional leads are generated through a high visibility in the natural results.
Avoiding ad fraud in China: Use a quality, trusted agency
A quality agency will take into account anomalies when they occur and create realistic projections and reports for clients. They will also not engage in such bad practice, it may inflate figures on reports but has no bearing on a clients end goal, quality lead generation, and is therefore not in one’s interest.
A quality, trusted agency is transparent, honest and results driven.
PPC is important but in our experience acts as a strong initial strategy for visibility on keyword searches and to back up the long term, sustainable effects of improving rankings in the natural search results. This is what we focus on to build long term profitability in China.
We are a Digital Advertising Agency in China !
We are our clients partner on the ground in China, as a trusted agency we can help you avoid the pitfalls of ad fraud and grow your business in this different, difficult but highly lucrative market. For more information don’t hesitate to contact us.