The State of Ad Fraud in China

21 February 2017

As we know, ad exchanges operate fully automatically. Due to the lack of human control, ad fraudsters are able to use non-human traffic activity for gaining profit. Ad fraud happens all over the world, yet in China the problem is particularly severe.

research on ad fraud

A report from RTBAsia, China’s leading anti-fraud tech company, tells that in 2015 “between 15% and 20% of China’s daily impressions traded on ad exchanges were from non-human bots registering impressions and clicking on ads.” The problem has gotten even worse in 2016. According to eMarketer research, at the $27 billion Chinese digital ad market, the fraud rate is up to 40%.

Ad fraud is regarded as a problem that cannot be controlled completely and has a bad influence on the advertising industry. Advertisers in tech agencies have their own complaints as to the situation. They believe some companies in China, claiming that they can solve the fraud problem, to be a scam.

The unique market and the Guanxi

Programmatic advertising in China lags several years behind western countries. Chinese programmatic ecosystem is still developing. The market is more fragmented and has unique Internet infrastructure. Thus, Facebook, Twitter, Google etc, which are popular in the rest of the world, are not used on the same level here.

Since the programmatic ecosystem is incomplete, the problem arises that there is no good third-party platform to help monitor the situation. There is also a lack of regulations for monitoring the problem.

Guanxi (literally – “relationship”) is an important notion in Chinese business culture. If an advertiser wants to get a deal, not only the focus on the positive solution is needed, but also building good relationships with publishers. Such relationships significantly strengthen publishers, while lowering the pressure of developing a mature market.

4 ways to fight Ad Fraud

1. All efforts to the industry

Advertising ecosystem is built on trust. In China, BAT (Baidu, Alibaba, Tencent) has more consumer data than the west, but they don’t share it. As the result, data cannot be translated to the industry at large. In order to solve this problem, the whole industry, including the advertisers, agencies and publishers, has the responsibility to improve integrity and promote transparency of  advertising.

2. Cut out injected ads

In the past few years, a number of advertisers were warned by Facebook about fake ads. Some appliances and battery products use injected ads to get bigger ad conversion. On Feb 8, 2017, Facebook emailed a number of advertising agencies in China, announcing the ban of Chinese app ads. Injected ads appear where they aren’t supposed to and create bad user experience. That is why they need to be stopped.

3. Third-party monitoring

Here is what needs to be done in terms of fighting ad fraud using the third party: 

  • Development of programmatic ecosystem and 3rd-party data management platform.
  • Monitoring the traffic in real time to stop deceiving ads before they get clicked. 
  • Third-party platform must keep improving its monitoring skills and provide its customers with more effective data.

4. Select your partners wisely

The recent Methbot Scam case proves the point. In the situation, when small firms fell victims to the fraudsters’ scheme, Admixer hasn’t been shaken. Thus, the problem affects larger companies on a much smaller scale.

To sum up, things will improve if the leading Chinese Internet companies, such as Tencent and Alibaba, take measures against ad fraud. And organizations, like IAB and TAG, need to start taking actions on Chinese market just the way they respond on other markets.

Want to learn more?

    Select
    Demand
    Brand
    Agency
    DSP
    Supply
    Web Publisher
    App Developer
    SSP
    Media House
    Others
    Ad Network Owner
    Tech Vendor
    Other/Not Sure
    You Might Also Like
    How Life-Extension of 3P Cookies Will Affect the Industry? - Admixer blog

    On 24 June 2021, Google once again grabbed the spotlight to announce that it has delayed a major privacy change to its Chrome browser. Google is postponing a plan to block third-party cookies until late 2023.   The official reasoning behind the decision — is the need to test sustainable alternatives that do not violate user […]

    How the delay in 3p cookies phase out will affect adtech industry? - Admixer blog
    Die Another Day: How Life-Extension of 3P Cookies Will Affect the Industry?

    On 24 June 2021, Google once again grabbed the spotlight to announce that it has delayed a major privacy change to its Chrome browser. Google is postponing a plan to block third-party cookies until late 2023.   The official reasoning behind the decision — is the need to test sustainable alternatives that do not violate user […]

    Read more
    Device fingerprinting - Admixer Blog

    Device fingerprinting, or you may have heard of it as web fingerprinting, mobile device fingerprinting, browser fingerprinting, or machine fingerprinting, has a concept similar to collecting human fingerprints by a detective, but not so obvious. With 3rd-party cookies soon becoming obsolete, fingerprinting will be one of the cookie alternatives that will help marketers target users […]

    Device fingerprint - hover image - Admixer Blog
    Device Fingerprinting: Pros and Cons of the Controversial Method

    Device fingerprinting, or you may have heard of it as web fingerprinting, mobile device fingerprinting, browser fingerprinting, or machine fingerprinting, has a concept similar to collecting human fingerprints by a detective, but not so obvious. With 3rd-party cookies soon becoming obsolete, fingerprinting will be one of the cookie alternatives that will help marketers target users […]

    Read more
    Identity Graph - Admixer Blog

    Marketers are facing an identity crisis propelled by cookies turning obsolete and Apple’s ATT coming into force. In light of the fading addressability, the identity graph provides time-honored stability as well as new exciting opportunities.  With the rise of people-oriented marketing, identity graphs have become the foundation of identifying people across channels and devices. They […]

    User Identity Graph - Admixer Blog
    Identity Graph: What Is in It for Marketing?

    Marketers are facing an identity crisis propelled by cookies turning obsolete and Apple’s ATT coming into force. In light of the fading addressability, the identity graph provides time-honored stability as well as new exciting opportunities.  With the rise of people-oriented marketing, identity graphs have become the foundation of identifying people across channels and devices. They […]

    Read more

      Stay updated with Admixer
      Privacy Policy