Winner take(care)s all : Rise of Mobile Ad fraud (1 of 7)

As you read this article, the global digital Ad spends in mobile has surpassed desktop ad spends in the industry valued more than $190Bn. Out of it, advertisers are estimated to be losing nearly 20% of their ad spends due to digital ad fraud. A notable thing is this percentage had been steadily growing outwitting all industry expert’s fraud projection in the last few years. Certainly, it is not a coincidence that digital ad fraud has been growing hand-in-hand with accelerating mobile ad spends.

Lack of rigidity in the fundamental attribution architecture coupled with industry dynamics is spearheading this phenomenon. In a way, mobile ad tracking mechanism happens to have quite a few loopholes which fraudsters are taking advantage of. To understand this, we need to go back in time by a decade and sail chronologically to apprehend how the digital ad industry had metamorphosed over the period.

Winner take(care)s all

In the 2000s till the inception of iPhones, digital marketing was predominantly website based and majorly dominated by Google. Reason for Google’s dominance would be majorly attributed to the ‘Winner takes all’ characteristic of the digital space where Google singularly dominated search engine market with more than 80% market share. However, the most important reason for their success should be ascribed to how precisely Google crafted and owned complete digital ads ecosystem during that time period. Let us understand how Google executed it.

Valuechain

The typical value chain of digital ad ecosystem contains publishers to the left, advertisers on the right and a cluster of supporting platforms in-between. This platform cluster in the middle has many interconnected units. Whoever happens control majority of these units would end set the rules in the game. The platform cluster has a supply-side platform that aggregates the publisher inventory and a demand side platform, which connects with advertisers and an ad-exchange in the middle, to match the supply with the demand.

Basically, Google controlled both supply and demand side platforms with their Ad-sense and Adwords products respectively. And its DoubleClick is the ad exchange, which matches publisher’s inventory with advertisers targeting needs. DoubleClick also on-boards large publisher directly into it as well. With these three platforms, which were highly adopted by the advertisers and publishers, Google had a tight grip over the complete flow of value and information in the industry.

The web browser also turned out to be another essential element in the chain. As all the traffic is generated through the browser, information recorded in browser become essential for segmentation and targeting of user traffic. While Google owned the complete ecosystem, it had also very well foreseen the part browser would play as the industry grows. It developed Chrome to enter an already matured market and gained substantial share there as well.

In this tightly knitted setup, where Google with advanced technical prowess ensured digital fraud (click spamming is the most sought out fraud in the web) was always under check. They understood, the presence of fraud not only acts as an impediment for new advertisers to try the products it also acts as a hindrance for existing big advertisers to scale further.

Google by proactively taking actions against existing frauds practices and preventing new malpractices from sprouting out increased trust among the advertisers. With proper access to all the data necessary to understand and control the fraud, Google acted judiciously. Even today if you were using Adwords, you could see Google reimbursing your spends on what it deduced as fraud clicks from the total billed amount. These kinds of actions boost confidence among the advertisers. Even with the almost monopolized market, the stakeholders felt peaceful in the fraud controlled environment. This goes by the saying

An honorable winner not only takes all but also takes care of all“.

However, the situation was reversed in mobile ad space.

To be continued…

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