What are the Lasting Impacts of COVID-19 on Ad Fraud as the Advertising Market Begins Recovering?

With numerous marketing strategies shifting to digital, how will the advertising industry grow in the COVID-19 era as it continues to deal with traditional methods?

The advertising industry is recovering even during the COVID-19 pandemic

Media Radar, a Japanese company that provides marketing and media materials to corporations, has conducted a study with its members to determine the extent to which the COVID-19 virus is affecting the advertising industry.

Advertising spend is expected to decrease but only temporarily

According to the results of the survey released, more than 70% of companies reported a decrease in advertising expenditures during the period of time when COVID-19 reached its peak and before and after the declaration of a state of emergency, April to June.

With no prospects for economic recovery, some retail stores were forced to close for a period of time or shut down operations completely. The situation seems to have improved since July when the state of emergency was lifted, and living in the “With COVID-19” era became the focus.

According to the results of the Media Radar survey, nearly 40% of respondents said that advertising spending has remained unchanged since July, and about 10% said that it has increased, showing signs of a slight recovery. The results suggest that the reduction in advertising due to the COVID-19 shock is not permanent and that it is possible to recover if the methods are deployed well.

What methods have been affected by the COVID-19 Shock?

The majority of the cuts in advertising spend created by the COVID-19 shock in the first place arose from the need for replanning.

Lifestyles had changed drastically in just a few months that led to promotional outages, and delays in service delivery and product development. At the time, many companies were wary of unnecessary spending because they had no idea how society would operate in the future.

Strategies for the Advertising Industry in the Age of COVID-19

But now that the term “with Corona” is spreading and the new way of life is taking hold, companies are beginning to formulate policies on what methods they should invest in.

Reduction of offline initiatives

Offline initiatives, such as pop-up shops and in-store sales promotions are now considered investments that are discouraged.

With the increase in remote work and the widespread trend to refrain from eating out, transportation advertising also took a negative impact. Offline activities are being kept to a minimum, and more weight is being given to methods that can be expected to be effective in advertising in the face of COVID-19.

Maximizing digital strategies such as Social Media

Digital methods are attracting more attention and are expanding in terms of advertising. Advertising initiatives have been increasing on social media platforms such as Facebook, Twitter, Linkedin, and more.

Social media has been an important method that has been attracting attention in the past, but COVID-19 has caused a loss of offline contact with customers, and its value will increase further.

The same is true for E-commerce.

Sales at brick-and-mortar stores have declined, companies are beginning to develop their own dedicated e-commerce sites to reacquire lost offline customers and reach new ones. Shopify, a Canadian e-commerce platform, saw a 62% increase in new e-commerce sites in the immediate aftermath of COVID-19 from March to April, compared to the previous six weeks. Japan is no exception to this trend. Figures showing the number of businesses using Shopify increased by 50% month over month in April, along with a 5000% sales.

In addition, developing new owned media, expansion of customer service by introducing chatbots and tools, and holding webinars have also attracted attention as effective methods.

Threats of ad fraud in the digital shift

While these digital initiatives can play a huge role in creating an online presence, they can also expose you to threats that do not exist offline such as ad fraud.

Ad fraud is a type of fraudulent network activity that is now a global problem.iAd Fraud involves disrupting proper ad delivery which degrades the performance of web ads. Ad fraud is becoming more complex and difficult to crack down every year, and as a result, is becoming increasingly common in Japan.

In the first half of 2020, the total amount of ad fraud damage in the Japanese market is estimated to be $38.5M. Many companies are expected to be affected by fraud without knowledge of it. As more companies are shifting to digital than ever before, there are concerns that the damage caused by ad fraud will only increase.

It could be argued that advertising operations in the COVID-19 era are inextricably linked to ad fraud measures.

How to deal with Ad Fraud in the COVID-19 era?

Ad fraud was rampant even before COVID-19 emerged, but some studies have shown that the pandemic has actually caused a temporary decrease in fraudulent activity.

Is ad fraud damage decreasing?

In March and April, when the threat level against COVID-19 was at its peak, the percentage of damage caused by ad fraud took a decline.

This can be attributed to the aforementioned significant reduction in ad placements and lower app usage, which in turn led to a relative decline in damage caused by ad fraud.

Now that the economy is slowly recovering, ad fraud abuse is on the rise again, and as advertising increases, so does damage. How can we counteract the damage caused by ad fraud, which cannot be legally enforced?

How to go forth with ad fraud countermeasures?

The basic process on how to deal with ad fraud remains the same, both before and after COVID-19. The first step is to get a proper understanding of ad fraud’s threat and to start thinking seriously about how to proceed.

Ad fraud can be minimized by implementing fraud detection tools and choosing the right platform. However, the number of marketers who see ad fraud as a problem still remains small, with the majority having a priority on achieving their KPI goals.

As digital marketing moves forward, so does the threat of ad fraud. Implementing ad fraud countermeasures such as Spider AF early on will not only prevent you from being targeted by this threat but will also help make the most out of your advertising budget.

Conclusion

While the impact of COVID-19 on the advertising industry has been tremendous, it is clear how companies are now putting their attention from offline to online initiatives. One of the biggest concerns along with the recovery of the advertising industry is ad fraud, but awareness of the possible risks brought about by this fraudulent activity will help companies take appropriate countermeasures in the long run.