Today we’ll be talking with Ryo Ueno (right), who is part of Funplex Inc.’s Marketing Communication Group/Product Marketing team and Gree Group Inc. Japan Game Division/Marketing group, and Drecom Inc.’s WEB advertising division group chairman, Satoshi Kameoka (left).
[Notes for our international readers: Funplex is a mobile game company that has developed games for franchises such as Naruto. Drecom runs a digital advertising agency. Interview translated from Japanese to English.]
Ad Fraud with a Good ROAS?
Q. Please tell me when you first became aware of ad fraud.
Mr. Ueno, Funplex Inc.: It was when I implemented a non-incentive network CPE billing model (Cost Per Engagement: a model that uses result points based on specified events post-installation), we were getting way more results than we were expecting, including billing, so that’s when we got suspicious and conducted an investigation.
In the end, it turned out that organic traffic was being manipulated by a kind of ad fraud called click flooding. Since ad fraud can even happen on media with a very good ROAS, not to mention the difficulties in spotting it early on, we began to really start taking serious notice on this issue.
During the same period, I also happened to have participated in Phybbit’s ad fraud seminar, where I heard from Drecom’s agency department manager. That was when I heard that the title that I was working on during my time at Drecom had problems with ad fraud. Back when I was managing that title, though I was not directly managing ads from the position of managing numbers, I was not posting on overseas networks where fraud was more common, and I was also in charge of refunds with agencies for fraudulent advertising. So I was proud that I was able to operate ads safely.
After I left, I got a chance to meet up and talk with them about how things were going. That was when I heard that about $60,000 worth of ad fraud had occurred, including back even when I was managing. That made the ad fraud problem hit close to home for me.
Q. Before you started using SpiderAF, what kind of fraud prevention were you doing?
Mr. Ueno, Funplex Inc.: We were using an ad-measurement tool’s anti-fraud system and looked at billing by operating ROAS from the ad placements. Media that did not meet the indicator was stopped after 3 days. Since we did a billing check every day, we were able to detect ad fraud early on just through installations but would continue to use bad publishers that were stealing attribution for organic traffic without notice.
Q. How do you use Spider AF?
Mr. Ueno, Funplex Inc.: During the ad placement period, we would observe it daily with the dashboard, particularly taking notice with the CTIT and device info. Being able to visualize the data and see suspicious activity is very helpful. Drecom (agency-side) decides on the deduction conditions with media and operates on that. As a result, nearly $10,000 of ad spend per month was saved from fraud. Spider AF reduces the time and human resources needed for fraud monitoring.
Q. Because there is the risk of sales decreasing by implementing fraud prevention with agencies, I think that it’s difficult for them to see beyond the immediate sales and KPIs. What do you need to do to reduce such factors?
Mr. Kameoka, Drecom Inc.: I think that this is an awareness problem. It’s difficult for agencies to do this but there was a case where we were able to eliminate $60,000 worth of ad fraud from our game business division by using fraud prevention. It was weird that even though ad fraud was happening at our company, the agency wasn’t doing anything about it. Though sales are going to decrease in the short term, we at Drecom feel that we have an obligation to help create a safe environment for the digital ad industry, whether that is the gaming business or agency business.
When I look at it in the short term, I think that our budgets and sales will decrease. But in the long run, it will pay off because we’ll end up building trust with advertisers. I think that it’s important to build on these friendly relationships. Because there have been many cases out there where companies have been blacklisted by advertisers.
Marketing Sense Is Important For Eradicating Ad Fraud
Mr. Ueno, Funplex Inc.: The victims of ad fraud are the advertisers. I think that there are a lot of marketers out there who continue to push ads out as long as KPI / ROAS is strong even if there are suspicions that it is ad fraud. Especially since ad fraud that snatches up organic traffic also occurs in billing, there are many cases out there where they show up with a high ROAS indicator.
If that’s the case, the money flowing into the ad fraud industry is going to keep growing while bad flows happen. The source of money comes from the company, and the advertising cost comes from the user who is paying for the app, so the user loses the most. By reducing the amount of money wasted on ad fraud, you can use that money for better events and interesting projects.
Mr. Kameoka, Drecom Inc.: Even when you are doing business, it’s difficult to determine what is ad fraud unless you look really carefully at the fine details. It’s difficult to explain and be satisfied. It’s important to have an organization system that not only just looks at the surface level KPIs but also at the contents of the advertisement.
I’ll keep saying it: I think that there needs to be an awareness that ad fraud is hurting the digital ad industry.
Mr. Ueno, Funplex Inc.: The most important thing for fraud prevention is understanding ad fraud techniques and trends. Eliminating it means to understand it. I think both advertisers and agencies will help if they have proper awareness.
Shifting Company Goals From ROAS to ROI
Mr. Ueno, Funplex Inc.: ROAS is a global standard but I think that viewing things from the point of view of ROI is also important. I think that investing in advertising and looking at ROAS from the users billing covers about half but I think that you have to look at ROI to grasp the whole promotion.
Mr. Kameoka, Drecom Inc.: I think that viewing data from a birds-eye view of things is difficult but looking from the view of ROI is the real deal.
Q. What trends have you seen in ad fraud recently?
Mr. Kameoka, Drecom Inc.: Recent fraud has been manipulating natural behaviors such as starting up an app after installation and going through the tutorial. Up until now, it was only until installation but if you don’t keep an eye out there are a number of clever ways for ad fraud to slip by.
And in response to feedback from our customers, we’ve started conducting CPE/CPA analysis!
Because of ad fraud, we think that people will start using CPE instead of CPI for ROAS. However, even when the focus changes to CPE, the fraudsters will find new techniques such as SDK spoofing or more sophisticated bots.
For events such as in-app purchases and tutorial completion, we have seen SDK spoofing become more common. This is when traffic from the SDK to the MMP is being faked in order to create app installs and events out of thin air.
Mr. Ueno, Funplex Inc.: Even if each player is talking about using a different kind of fraud prevention, the results may not be significantly better. I think that from now on we’ll be teaming up with Drecom in order to create a safer industry.
Mr. Kameoka, Drecom Inc.: As a partner, let’s eliminate ad fraud together.
Thank you very much!
Phybbit is the market leader in Japan and is leading the charge against ad fraud. Our product Spider AF is now available worldwide! Get our latest ad fraud white paper here and apply for your free trial of Spider AF here.