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China-based advertising technology company AdMaster released its second annual white paper on ad fraud, which highlights worsening conditions in China. eMarketer spoke with Calvin Chan, AdMaster’s COO, and Peiyu Ren, vice president of products, about the company’s call for all participants in the digital advertising ecosystem to collaborate on establishing advertising standards and enforcement mechanisms.
eMarketer: AdMaster’s digital ad fraud white paper highlighted that 30% of the digital advertising traffic in 2016 was invalid. Could you elaborate?
Peiyu Ren: Based on our data, invalid traffic worsened approaching the year’s end. From January to December 2016, the invalid traffic continued to climb, going from 28.9% to 38.7% of total advertising traffic.
eMarketer: What types of digital media and advertisers suffer the most from ad fraud?
Ren: We screen invalid traffic in four categories: frequency abnormality, source abnormality, behavioral abnormality or unstable users. On the media side, vertical media has the highest invalid traffic percentage. If you drill down into the data, media focusing on the women, mother and baby and automobile verticals have the most invalid traffic.
eMarketer: How do you explain that?
Ren: Vertical media in China do not follow IAB [Interactive Advertising Bureau] or MRC [Media Rating Council] standards. Media sites such as online TV platforms like Youku, iQiyi or Tencent follow a standard, so the data transparency is good, depending on the data the third-party data trackers can get. But in vertical media, publishers only accept image-tag tracking. They don’t allow third parties to add code to their sites, so the data is less robust than other types of media.
eMarketer: How exactly is digital ad fraud being committed in China using PCs and mobile devices?
Ren: Some organizations use scripts in a program or automated task software to simulate users’ behavior—such as opening a website, viewing or clicking an ad in a website or app. Some control a botnet to let a large number of devices do so. In China, mobile devices are cheap, so there are lots of companies that buy thousands and thousands of them. They use software to change the device ID, then control them to generate traffic.
eMarketer: What is the current standard for ad viewability in China? How is it different internationally, if at all?
Calvin Chan: We don’t have a standard developed in China. Having said that, there are two organizations that have been working toward this goal. One is the Mobile Marketing Association [MMA] China. The other is the China Media Assessment Council [CMAC], which is China’s version of the MRC. They have been working closely with the MRC and the IAB in the US.
The final product is probably going to be based on the experience and the standards in the US generated by the IAB, the MRC and the MMA, or even the Trustworthy Accountability Group [TAG].
Online TV [OTV] pre-roll ads might be more important for China, and there are new ad formats based on OTV’s popularity, which require more viewability. China has also been developing rapidly in the programmatic space, especially in programmatic direct buying and preferred deals. I think this is another driver for having ad viewability standards.
eMarketer: What are the biggest challenges to overcome to build a trustworthy and fraud-free digital advertising ecosystem?
Ren: The first goal is to set up an industry standard and to find a way to push everyone in the game to follow it—that’s very important. The second is that the transparency of the data is very important for ad tech companies, marketers and publishers. We think we should all have the heart to open more data to our partners and to see details, so we can find and solve problems.
eMarketer: It appears that there is a new push among industry professionals in pursuing better measurement practices. What caused this shift?
Ren: [Procter & Gamble] chief brand officer [Marc Pritchard] spoke at the IAB annual leadership conference calling marketers’ attention to invalid traffic measurement. Marketers in China now are pursuing solutions. Again, invalid traffic is very difficult to detect, so if the marketer has the power to push publishers to accept more IAB standards and share more of their data, they can gain more real traffic and improve return on investment.
Chan: I think a lot of advertisers are following the steps suggested by Marc Pritchard for requiring more third-party tracking, standards and better practices on the ad quality side of the measurement—and not just the content.
The major media companies, particularly the BATs [Baidu, Alibaba and Tencent] have also been pushing for a more accountable environment.
We have seen a really serious situation with fraudulent traffic. You can actually go to Taobao and buy fake impressions. This is just getting crazier and crazier, so the industry has been asking itself and third-party providers to create a cleaner and more accountable space.
As programmatic advertising matures, buyers and sellers no longer see it merely as a means of automating processes, but rather as an advanced method of controlling ad campaigns—and better targeting the audiences that come with them.
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