It’s less than two months until Asia Pacific’s biggest shopping season begins, but consumers are not the only ones counting down. As the holy trinity of shopping festivals – Singles Day, Black Friday, and Cyber Monday – deliver a dramatic upsurge in online traffic, cybercriminals are gearing up for their own windfall in the form of advertising fraud. Like any seasonal holiday, retailers and e-commerce sites will naturally ramp up their digital advertising efforts, a gold mine for fraudsters intending to sabotage these campaigns for financial gain.

For unwitting retailers pouring millions of dollars into digital advertising,  ad fraud is a problem that is bigger – and more costly than most are aware of. Today, digital ad fraud in APAC is estimated to cost $17 million per day, a figure that will only rise during the height of November’s shopping spree. There are three key ways to prevent and minimize the effects of ad fraud. However, first, retailers and digital marketers need to understand the causes and effects of ad fraud; who the criminals are, and what their tactics are.

Widespread misattribution

Ad fraud is primarily when criminals use bots and click farms to exploit advertising platforms and brands by masquerading as real human traffic on digital campaigns. These false clicks inflate the ad’s traffic and impressions, thereby skewing a marketer’s campaign data and wasting their budget. Frustratingly for marketers, ad fraudsters have become increasingly sophisticated at mimicking human behavior, therefore making bot activity hard to detect and curb.

As well as bots, ad fraud also extends to click spam and click injection, whereby fraudsters execute clicks for users who haven’t made them and steal organic users. For e-commerce retailers, ad fraud is highly pervasive, as bots create multiple fake accounts to take advantage of sign-up offers.  Collectively, these tactics hamper a brand’s search engine optimization performance; generate false leads, and pollute sales pipelines and key marketing metrics. They also lead to widespread misattribution of e-commerce app installations and in-app events such as sign-ups and purchases.

For marketers, this is a hard-earned budget down the drain. This year, APAC is expected to spend $60 billion on mobile app install campaigns, of which roughly a third will be spent on e-commerce. However, according to our figures, 40 percent of these installations are invalid. That means $720 million is wasted on activities that will add no value to advertisers. That gargantuan figure comes before the increased return on ad spend from budget going to genuine users is factored in. Ahead of a holiday, retail marketers and agencies invest time, creativity, and energy into exciting and engaging campaigns to draw in their target audience. Seeing that effort and money wasted is highly demoralizing for all involved.

Combating the threat of ad fraud, however, also requires its own time and effort, and preparation is critical. The first step is to keep a close eye on the numbers. Ahead of 11/11, the first of the big shopping festivals, marketers and their agencies will need to set clear metrics and monitor them closely. If any abnormalities occur during a traffic spike, such as small user session times, high bounce rates, and abnormally high click-through rates, there is a potential likelihood of fraudulent traffic.

The next tactic is to refine ad targeting and set tighter audience frameworks for each campaign. The more precisely marketers target their audience, the easier and quicker it is to detect unusual activity. Targeting high-quality websites is also key. Poor-quality sites are more likely to draw ad fraudsters. Marketers and their agencies can mitigate this by targeting a select group of specific, high-value websites, rather than mass-targeting sites with the relevant keywords. Marketers can also blacklist domains and IP addresses.

The final step is to study traffic sources. If, for example, a campaign targeted Singaporean shoppers and a high prevalence of traffic was coming from elsewhere, it may be ad fraudsters coming from that geographic location. Retail marketers and their agencies will also need to be watchful during high spikes of traffic during the shopping season. If conversions or other important metrics are not appearing amid the traffic volume, there may be fraudulent activity occurring.

The November season is now arguably the highlight of APAC’s retail calendar alongside the Lunar New Year. But for retail brands coming under sustained bot attacks, the season of merriment can quickly become one of stress. However, retail marketers who prepare and act swiftly will be counting their investment returns, and not their losses, once the shopping season ends.

Chadwick Kinlay is the Chief Marketing Officer at TrafficGuard.

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