Japan continues to witness high ad fraud while emerging markets make headway: IAS report

An increase in local brands investing in verification and fraud prevention has driven down brand risk and ad-fraud rates in Asia's emerging markets, while wealthier economies continue to be a lucrative target, according to Integral Ad Science.

The verification firm's Media Quality Report for the first half of 2021 shows that Indonesia recorded one of the biggest reductions in brand risk for mobile web display globally, down 4.8% compared to the prior six-month period. Indonesia continues to be well above the worldwide average for brand risk in mobile web display inventory, at 4.5% compared to a 2.6% average. But it is also a mobile-first market, with 96.4% of the country’s 202.6 million internet population using their mobile devices to access the web.

Laura Quigley, APAC SVP at IAS, told Campaign Asia-Pacific that one of the biggest factors behind the reduction in brand risk in Indonesia is a sudden spike in local clients using a blocking solution designed to reduce fraud, as opposed to simply reporting on it.

"We've always seen a lot of global brands understanding the importance of verification, or at least implementing it," Quigley said. "Now what we're starting to see is local brands and publishers, specifically in some of these emerging markets, actually taking verification up and actively blocking. That's a huge shift that has happened in the last six to 12 months."

IAS placed a consultant on the ground in Indonesia last year to educate the market about verification and fraud prevention, which Quigley believes has helped to contribute to a greater uptick in blocking solutions. The firm also launched a training programme for digital verification earlier this year.

Programmatic inventory in Indonesia registered lower brand risk overall, at 3.9%, than publisher-direct inventory, at 5.6%.

Indonesia also reported improved brand-safety levels in desktop display, at 4.7%, although it remains well above the 2.4% worldwide average.

Other emerging economies, India and Vietnam, were among the top brand-safe markets in IAS's geographies for desktop display in the first half of 2021. Vietnam's desktop display brand risk was 0.6%. India reduced its risk to 0.8%, followed by New Zealand at 1.3%, Singapore at 1.4% and Australia at 1.8%.

However, India and Vietnam's low brand-risk rates are likely explained by IAS's client base, which is predominantly global brands in those markets. Quigley suggests that as the business begins to grow its local-brand client list, thus including more local brands in its statistics, the trajectory may change.

Meanwhile, Japan and Singapore reported the highest ad-fraud rates in IAS's geographies for desktop display. Singapore's ad-fraud rate on desktop display rose by 0.9% to 3%. Japan's rate decreased by 0.2%, but it remains the second-highest at 2.6%. These are well above the 1% worldwide average.

Elsewhere in Singapore, viewability on display environments declined, with desktop display reducing 7.3% to report 62.5% and mobile web display hitting 56.9%. However, on mobile app display, viewability surged 8.7% to 74.9%, making it one of the most viable environments in Singapore.

Japan continued with the downward viewability trend and registered 54.8% viewability rates on desktop display—well below the worldwide average of 69.5%. Mobile web display viewability dropped in Japan by 6.5% to 45.4%, compared to a 64.3% worldwide average.

Japan remained the market with the highest ad-fraud rates in mobile web environments, with display reaching 2.3% and video reaching 2.9%.

Quigley explained that IAS doesn't see as many advertisers actioning on fraud in Japan versus other markets. However, that is starting to shift as third-party ad server penetration grows, which means more advertisers can now actively block against fraud, she said. The firm is expecting a reduction of Japan's fraud rates in the next six to 12 months.

Another reason for Japan and Singapore's above-average fraud rates is the fact those markets have higher CPMs.

"When CPMs are higher, that means that it's a lot more of a lucrative market for fraudsters," said Quigley. "As we see more investment in digital and maybe less in traditional, we might see that counterbalance."

Elsewhere, Australia registered the highest rates among IAS's markets for desktop video ad completion (on average 89%), as well as the lowest drop-off (10%). By contrast, the US registered the lowest video ad completion rate, with an average 76.5% and a 13.6% drop-off.

Quigley attributes Australia's completion rates to a combination of engaging publisher content, high-quality creative and ad targeting.

It's important to note that IAS's Media Quality Report only analyses Australia, India, Indonesia, Japan, New Zealand, Singapore and Vietnam in APAC. IAS does not have a presence in China, which is often cited as the biggest market for ad fraud globally.