Ad frauds are growing at a faster rate than growth of digital marketing: Dhiraj Gupta

Expectations from Digital Marketing have changed across industries and sectors. Rather than a backstage actor for many organisations, Digital has become the frontline warrior to keep the businesses up. Consequently, marketers see a paradigm shift in their roles, where RoI becomes an even more important measure. With the growing digital aspects, digital ad fraud has significantly increased.

The digital world is plagued by Ad Fraud & Brand Safety issues that impede the growth of campaigns. As fraud is a cyclical element, more than 51% of global web traffic is already contributed by BOTS. If the internet was a company, we humans aren’t in control anymore and the BOTS already dominate its multiple spheres. Fraudsters are continuously developing technologies to cheat the ecosystem whereas tech companies are constantly evolving to find ways to stop these fraudsters.

To prevent such ad frauds from happening with brands and advertisers, there are companies like mFilterIt who provide comprehensive solutions for Ad Frauds, Brand Safety and Infringement. It uses complex algorithms to actively monitor surface as well as dark web spaces and then using ML and AI convert them into meaningful and actionable reports helping brand custodians and community owners to proactively safeguard from any potential harm to the identity and privacy of their community members. It empowers the customers with a holistic view of their respective journeys in the digital ecosystem by providing them with real-time accurate data that helps them understand their returns on digital investments.

mFilterIt is globally associated with companies like Amazon, Flipkart, Unilever, HDFC, ITC, Oyo, Cred, Starzplay, Paytm, Disney and many more and has saved more than $200+ million for its clients. It has 2.5 billion device coverage and validates 350+ million transactions daily.

In August 2020, mFilterIt launched a report on ‘The Digital Ad Fraud’, which analysed the long term implications of COVID-19 on the ad-fraud issue and how it is going to trend in the near future. The report highlighted that the companies have curtailed their overall advertising budget by 30-50%. At the same time they have at least doubled their digital advertising spends. It also further stated that in many organisations the digital contribution of revenue was in a single digit percentage of the total revenue (6-8%), which is now vice-versa, especially in the B2B environment.

Though the standard ad-fraud rate for such businesses shall be contained within 25-35% of the range, they will still lose more money for ad-fraud as the base increases exponentially. This translates into the 25-35% ad-fraud percentage translating into many more millions of dollars. As per data analysed, the same percentage could mean 3-4 times more money being based on ad-fraud through performance campaigns.

In an exclusive interview with Adgully, Dhiraj Gupta Co-Founder & CTO, mFilterIt, speaks about the complex world of ad fraud, the loss faced by advertisers and brands due to the increasing instances of ad fraud, as well as the safeguards and comprehensive solutions that can protect the marketers in tackling such frauds, and more.

Digital Ad Fraud is a complex ecosystem. Could you demystify it for us? What are the various ways in which such ad frauds are happening and how are the fraudsters evolving with time and technology available?

Yes, Digital Fraud is complex. There’s a lot of chain of people and technology involved in serving administration. And over time, especially inside, a lot of technology has been brought in, in terms of automating and serving ads in new ways or targeting people in new and new ways. But one thing which allows this is the same technology which is used to target people and used to serve ads and to repeatedly run boards. It can also make sure that you can have a huge number of impressions and clicks. So, we see chatbots, voicebots, AI and machine learning, which have become very common now, and speaking of speed, it should come as no surprise that the same bots can also be used to do digital ad fraud.

The evolving area every day is being found by fraudsters to do ad fraud. When we started about five years ago, fraud was still in its infancy. It was basic, and there were some very simple ways by which you could identify and set up checks. But over the last 3-4 years, with the advent of AI and ML, bots have also become smarter and they are able to now evade detection and have more complex fight back scenarios. That’s why technology needs to keep evolving to fight these fraudulent layers. At mFilterIt, it’s a cat and mouse game every day, we find new ways by which fraudsters have evolved and then we make sure that that technology is up to speed and is ensuring that advertisers are protected at all times.

What is the kind of loss that advertisers and brands face due to ad frauds?

We did a recent news article where we estimated that in India, the amount of loss is something in the range of Rs 3,500 crore in a year. I would actually represent that in India, this is still an evolving space and is still growing very, very heavily. Due to COVID-19, Digital as an area of share marketing is increasing at the cost of offline media or radio or print, which means that as the share has increased, the share of the contribution of ad fraud is increasing at a faster rate. I think advertisers need to be very, very cautious when they are spending digitally to ensure that they are getting the right ROI and the right returns on their spends.

How has the ad fraud situation worsened during the COVID-19 pandemic? What are the factors due to which such ad frauds are escalating in India?

Two things have happened during the COVID-19. The first is that the advertisers have increased their wallet share towards digital more than the cost of print and radio and so on, which means that the share of the pie has increased and more money is being invested in the digital platforms, which has become a bigger issue in terms of the actual number of losses. The second aspect is in terms of how devices and user behaviour is evolving in COVID-19 times. Because of Work From Home environments, more and more access is on personal devices, which are not always protected to the same level as a corporate laptop or a corporate device running in a corporate VPN. This means that these digital frauds and scams are actually increasing during COVID-19 times because more and more people are now accessing online content from their personal devices, which may not have the right protection in terms of antivirus or malware protection. Which means that there is more opportunity for fraudsters to scam you. So, I think the combination of both of them is ensuring that Ad frauds are actually growing at a faster rate than the growth of digital marketing.

Could you give us an understanding of how ad frauds are taking place on the newer platforms – such as OTT, connected TVs?

Basically, anything which has a digital play, which has an online connection and Internet connection, has a browser, is something which is exposed and it has the potential to be cheated upon. Connected TV, for example, is the latest area. As in India, more and more TVs which are being purchased, by default are online connected TVs, and we all know, mostly when we are accessing our TV content, through apps, we are seeing ads coming up consistently. What’s happening is that all these new technologies have a mildly waste kind of an area, there’s no basis of protection available. The kind of fraud which could happen 10 years ago on the website, is still possible on connected TV right now, because the verification technology is not ranked up on the same level. In the newer media, the level of fraud is actually higher.

What kind of safeguards do marketers as well as users need to adopt to protect themselves from such frauds?

There are two levels through which advertisers can safeguard themselves. The first and the basic level is that they should be actively looking at data and they should never assume that there is no fraud. Besides, they should also never assume that if they are getting performance, if they are getting sales and results, there is no fraud. Irrespective of whether you perform or not, fraud is something which will keep coming in, which will keep hitting the advertiser. If they keep a close eye on their own data, they will always be able to find indications that things are going wrong, they will be able to see that more and more traffic is looking suspicious. So, they can at least be aware about that, and the first step of solving a problem is to be aware that you have a problem.

But then how do you deal with it? Solutions by fraud detection companies like mFilterIt can help advertisers by providing the protection to the advertisers. For example, In cricket, when you are a wicket keeper and when you have gloves, knee bags, and all sorts of protection then you can jump and slide easily as you know you will not get hurt. Ad Fraud protection technology like mFilterit allows advertisers to do the same thing. We are the protection for advertisers, so that they can jump, they can take chances, they can just play the game, which is growing their business, by making sure that we will keep them protected. I think one should be aware of this issue, and second is that they should be a part of it, at least be able to run through data so that you can see patterns that are indicating wrong signs, and then use a tool like mFilterIt to keep yourself protected in almost a similar way how everyone is supposed to be using an antivirus software to protect their devices like laptops and mobile phones.

As a company that provides comprehensive solutions for Ad Frauds, Brand Safety and Infringement, how is mFilterIt helping brands and marketers tackle ad frauds and protect the bleeding of ad budgets?

Every day we are processing billions of transactions, cleaning, scanning for bank traffic, and we are consistently protecting expenses from being wasted by advertisers. Recently, a security firm did a study where it was found that in 2021, from January onwards, on any website, only 30% was human traffic and the majority of traffic was actually BOT traffic, which was slated at 64%. This means that the machines have already taken over human traffic. That is the kind of fraud which is present online and we at mFilterIt are able to make sure that we are reading traffic consistently by identifying bad traffic for customers. Many of the advertisers who run with more mature channels, face lesser fraud, but that is also in the range of over 20-25%. So, on an average, that’s the one big savings which we bring for advertisers on every day basis when we are processing billions of records for them on their digital spends.

What are the complexities involved in the fight against ad frauds?

The complexities involved is that there is no law right now which says that ad fraud is fraudulent and is not treated as a criminal activity, not just in India, but globally too.

The system and laws need to be ramped up so that any individual or organisation indulging in digital ad fraud can be given prison sentence.

Many times, advertisers, too, turn a blind eye towards ad frauds and assume that there is no fraud on the campaign. I think if advertisers start asking questions on ad fraud, it will ensure that the ecosystem starts demanding more action and transparency.

Are there provisions in the New IT Rules 2021 that address the menace of digital ad frauds?

Unfortunately, no. They come close, but they don’t actually cover it. The Government talks about hacking, cyber security and privacy, but the New IT Rules do not address ad fraud. This is not just in India, but even globally there is no law right now concerning ad frauds or digital ad frauds. Along with a Swachh Bharat, I think we need to also bring about a Digital Swachh Bharat.