India has a big mobile advertising fraud problem

India has a mobile advertising fraud rate of 31.9%. When compared to the global average of 15% that’s a rather shocking number.

Let’s first gain a better overview of the country’s mobile economy. According to a report from mobile marketing company TUNE, the country has seen significant growth across its mobile-first economy. There are now 221 million smartphone owners and 77% of its population currently has a mobile subscription. Around 9 in 10 Indian smartphone owners play mobile games each week and games have grown at double-digit percentages each month.

Now back to those fraud figures. According to TUNE, the results mean that Indian ad fraud is around 50% higher than the global average and 2.4x as high as the rest of the world. These figures largely relate to fraudulent clicks. Let’s take a closer look at mobile app install fraud.

According to a sample of 437 million mobile app installs from January to May 2017, Guatemala has the highest mobile app install fraud rate at 23.65%, whilst Poland had the lowest fraud rate at 1.57%. India showed a mobile app install fraud rate of 16.2%. That’s still very high, though surprisingly lower than fraud rates in Italy, Spain or Germany.

For marketers, these should be sobering results. After all, $7 billion annually are lost to ad fraud. Indeed, ad vertification firm Adloox estimates that ad fraud will be more than twice as high in 2017 at $16 billion.

Given the rapid growth of its mobile app and ad economy, India runs the risk of falling victim to increased rates of ad fraud.

It has been estimated that digital advertising spend in India will reach $1.2 billion this year, accounting for 14.3% of total media expenditure. However, $350 million of this are being lost to fraudsters.

Among the leading types of app install fraud in the country are click fraud, install fraud and compliance fraud – the latter relates to clicks which are genuine, but targeting the wrong demographic.

TUNE points out that there are other types of ad fraud such as viewability fraud and bot fraud which advertisers are wasting their hard earned money on.

One of the reasons why India in particular is at risk of increased fraud rates is the country’s rapid mobile economy growth. Given the size of the Indian mobile advertising market and the sudden rise in opportunities, marketers can become impatient and move their money quickly. Increased advertising opportunities are leading to increased opportunities for spammers.

Jim Tommaney, enterprise data evangelist at TUNE explains:

“Often, ad networks re-broker ad traffic to other ad networks or to sub-publishers. One ad network is contractually working with other ad networks. This is generally legitimate as networks provide media buying, but questionable or fraudulent traffic can more easily enter the picture.”

The question is: what can marketers do to avoid ad fraud?

TUNE says that paying attention to bottom-funnel metrics is the first step. These include clicks, views and installs, but also sales and long-term engagement metrics. Some of these just aren’t possible. The old adage of “if it’s too good to be true…” also holds in mobile advertising.

Swati Sud, digital marketing manager, OLX India, adds:

“The journey in fighting fraud for OLX India has been quite interesting. Initially, we started with tightening the attributions as TUNE gives us full control to change the attribution methods and windows. Then, we started to dig in the raw data provided by the install logs report. We built in rules pertaining to mean time to install (MTTI), duplicate IPs, gross clicks, app versions, incorrect format of identifiers, et cetera, and paused all sources that breached the threshold […]. In the course of time, we have seen an increase in organic traffic and managed to get good savings.”