David Blecken
Jun 11, 2018

Cultural norms mean ad fraud overlooked in Japan

Mobile measurement company Adjust's co-founder says people are reluctant to admit that fraudulent activity is an issue.

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New research into mobile ad fraud by Adjust, a mobile measurement company, indicates that click injection is the most prevalent form of fraud in Japan, while software development kit (SDK) spoofing has taken over as the biggest problem globally.

Adjust said click injection accounted for 49% of rejected app installs in Japan so far this year. The company rejected 22% of installs due to click spam; 21% due to SDK spoofing; and 8% due to the installs being fake.

By contrast, globally SDK spoofing accounted for 37% of rejections, followed by click injection (27%), faked installs (20%) and click spam (16%).

Ecommerce overtook gaming as the hardest hit sector in Japan. Utility was the third most affected category. Globally, the three most targeted categories were ecommerce, gaming and travel. Adjust estimates that mobile ad fraud will cost advertisers just under $5 billion globally this year.

A spokesperson for Adjust in Japan said it was “just a matter of time” before SDK spoofing becomes a bigger problem in the country. She said Adjust had seen single campaigns with an SDK spoofing rate of up to 80%, meaning that amount of the advertising budget was wasted.

In an interview, Paul Müller, Adjust’s CTO and co-founder, said Japan’s culture of trust and a reluctance to acknowledge things not going to plan meant that people do not yet take the threat of ad fraud seriously enough.

Müller said Japan was “the market with the lowest adoption rate for fraud prevention that we can see”. (Adjust claims to help prevent mobile ad fraud.) “When it comes to fraud, Japan is a very specific market because it’s such a trust-based culture and people have this undying belief that networks are innately good,” he said. He added that agencies did not have a strong incentive to make clients aware of fraudulent activity, because doing so could result in significantly reduced media buys.

Campaign asked Dentsu, as Japan’s biggest media buying agency, for a reaction to this assertion. A spokesperson did not comment directly but said that “Dentsu Group recognises ad verification as an important issue” and noted that the company was a Certified Viewability Partner of Integral Ad Science (IAS); that it had developed a private marketplace (PMP); that it had established the Association for the Promotion of Ad Verification along with Cyber Communications Inc, IAS and Momentum; and that it had received a certification of compliance for ad delivery from the Interactive Advertising Bureau (IAB).

Müller pointed to China, Russia and Israel as the most cynical, and as a result vigilant, markets, largely because they are where the majority of fraudsters originate from. However, even in China, he said many companies opt not to address fraud if instances make up less than 10% of their total spending. “We can see the same networks defrauding people across the world,” he said. The level of mobile ad fraud is lower in Japan due to the predominance of iOS over Android, but Müller noted that Japanese advertisers should be aware of the problem because they also buy internationally.

He advised advertisers to “do your homework”. “If you understand who’s lying to you and why, you’re much better off than just trusting anyone, including us,” he said. But he admitted there were reasons to avoid rocking the boat. He said in some cases, user acquisition managers had been fired after presenting figures showing the level of fraudulent activity on their platforms.

“With spoof users, you can have as many as you want,” he said. “Talking to the guy in charge and saying there’s a financial problem and we need to set different goals produces a lot of conflict. If you say your current idea of how it works is based on flawed data and we have to clean this up, and this affects the report you send to your investors, then you have a problem… and people don’t like talking about problems.”

Campaign Japan

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