Ad Fraud: Indonesia Could Lose up to 120 Million US Dollars

ads fraud

Ad Fraud: Indonesia Could Lose up to 120 Million US Dollars

Ad fraud is a new growing problem which is faced by marketers in Indonesia. The latest survey released by the Mobile Marketing Association (MMA) and Integral Ad Science (IAS) revealed that Indonesia is easy target for ad fraud. According to the data from IAS, Indonesia could lose up to US $ 120 million or Rp1.7 trillion due to ad fraud this year.


Contributing factor

The high rate of ad fraud in the country is due to the significantly growing scale and volume of mobile penetration, the use of e-payment, and mobile marketing expenses. Ad fraud is a deliberate attempt by perpetrators to manipulate the impression of advertisements so that marketers pay money for ads which are not delivered properly.

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One example of the fraud’s modus operandi is when a publisher places advertisements on sites which are not the target markets. This way, impression rates of the ads may be high, but it is low in sales conversions. The more people see the ads, the higher ads impressions, the more money the marketer should pay for the publisher, however, as these people are not the target market, although many of them see the ads very little of them decide to buy the product or service. It causes low sales conversions rate for the marketers. In other words, marketers invest their money in useless advertisements.

Lack of understanding is also a contributing factor to the high rate of ad fraud. The survey revealed that there were still 33% of marketers who have no idea how much their ads budget can be subjected to ad fraud. Ecommerce, financial technology, FCMG, and games are sectors hit by ad fraud the most.
Ad fraud is a problem for everyone. It harms marketers who spend valuable resources delivering their messages, tarnishes publishers’ reputation, and triggers dispute-causing friction in business environment.


Combatting fraud

Indeed, education and sharing best practices are essential in raising awareness over the threat. The survey also said that not all aspects of the frauds were explicitly illegal. That situation typically happens in countries with ineffective cybercriminal law. Therefore, efficient, proactive approaches to avoid fraud are more advisable than relying on cybercriminal law.

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From a technical approach, marketers should implement data intelligence-based system to monitor their ads and brands. Transparent communication over ads’ benchmarks between marketers and publishers is also essential to build trust and avoid buying a pig in a poke.
In addition to the technical approach and communication, marketers also need to vet publishers. However, solely relying on a publisher’s blacklist is not enough as it might not be updated regularly. Thus, marketers need to conduct due diligence during the vetting process. To know more details about how due diligence works, do not hesitate to contact us.

We cannot eradicate ad fraud entirely, but at least we can suppress the number to as minimum as possible.




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