Ad frauds cost Japan advertisers $38.5m in 1st half of 2020: Spider Labs

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SINGAPORE: During the peak of the Covid-19 lockdowns in Japan, during April and May 2020, ad fraud activity slowed down according to an analysis by Spider Labs, an artificial intelligence technology company that offers an ad fraud countermeasure service. In the 2020 First Semester Ad Fraud White Paper, Spider Labs reveals that out of 42 million installs in the six months between January and June 2020, approximately 18.5pc were found to be fraudulent.

“If left alone, at a rate of $5 per install, the resulting damage would be $38.5 million during this six-month period in Japan alone,” said the report. “Fraudsters are not taking a break during the Coronavirus pandemic, and advertisers need to make sure they are aware and prepared for fraud. There is a limit to what each company can do, and it is necessary for the entire industry to work together to take measures.”

According to Spider Labs, one of the collaborative initiatives was a crowdsourced blacklist where information was shared about ad fraud, with the intention of improving the safety of the internet advertising industry.

The role of Apple in ad fraud

While the report from Spider Labs acknowledged that the iOS 14 update, which has been delayed as first reported by The Information, is intent on giving users more control over their data privacy, the depreciation of the identifier for advertisers (IDFA) reduces data transparency and will cause fraud to be harder to detect than ever before. 

“Installs will begin to be more anonymized, and click to install time (CTIT) will no longer be a reliable method to identify click farm or flooding,” said the report. “Although SKAdNetwork is providing some security around the prevention of forged of data, sophisticated algorithms will continue to be essential in making sure that the digital advertising marketplace remains a healthy and safe place.”

The report found that within the app installs that were fraudulent, 72.3pc were for iOS while 27.7pc were for Android devices. The click farm rate and click flooding rates were 11.3pc and 7.2pc respectively, with iOS seeing 64.6pc and 79.9pc respectively of the install distribution.

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