Mobile Fix: Should ad fraud stop you investing in digital?

This week Simon Andrews, founder of Addictive!, looks at the impact ad fraud is having on the digital landscape, new devices from three of the big players and developments in China.

The recurring problem with fraud in digital advertising is polluting the discussion over how much investment brands should be switching over to digital. Whilst the argument is clear – as consumers change their habits, so should brands that want to keep up – the background noise over fraud and viewability is a diversion.

The problem is that just as the sheer volume of money in digital advertising attracts lots of VCs to invest in ad tech, it also attracts lots of criminals. So the arms race between the ad tech that verifies spend is going in the right places and the bad guys is heating up.

This week we heard two great examples that demonstrate the problem.

You have probably seen the meme of your porn name? The name of your first pet is the first name and your mother’s maiden name is the surname – so mine is Pluto Clement. Great fun, but everyone now knows two of my answers to the most common security questions online.

Then at an event this week discussing fraud, one of the audience made the sensible comment that where a campaign is measured against a purchase, fraudulent views and invisible impressions below the fold don’t really have any effect as the bots don’t buy things.

It turns out they do.

Filling forms online is pretty straightforward to a fraudster but they also have lists of stolen credit cards with which to make the purchase. Eventually the sale will be cancelled and the money refunded to the person whose card is used, but the fraudster is long gone with the CPA commission.

Now having the right partners and paying attention to how your campaigns are being managed can protect you from most, if not all, of this. And not investing in digital for these reasons is no more sensible than pulling your money off TV because people do go make cups of tea when the ads are on.

On the panel at the Facebook upfronts this week I made the point that we now have an unprecedented situation; for the first time in a long time it is possible to get a significant competitive advantage in your sector.

Your rivals have the same distribution as you do, similar brand awareness and a product that is probably top parity. So gaining advantage has been hard.

But we are now at a point when being much better at mobile and social can give you a clear advantage.

Your competitors’ agencies are probably just as good at making the most of ITV, etc, as are yours.

But if your team can get more reach, attention, engagement and, yes, sales from Facebook, Google, etc, then that’s a great place to be.

What are you waiting for?

New devices

With Samsung, Google and Apple all launching new products this week we have seen each brand get their 15 minutes of social buzz before the next launch. First the Samsung Note 4 had everyone extolling its virtues; then along comes Google with its new Nexus 6. Early indications are that the new devices are impressive and the look and feel of Lollipop is a clear improvement whilst the other features sound promising.

And then there are the new iPads – with lots of upgrades and some data on sales to counter the theory sales are flattening out.

The Xiaomi model of longer production windows for their product does look smart as they profit from falling component costs – what are Google and Apple going to do with the 7 that makes people want to upgrade? And what will the next iPads do?

Clearly the iPhone and the top end Androids work as Veblen goods – status symbols – or at least as social objects; many people have raised bendgate when they have seen our new iPhone 6 and we know people comment on the size of the 6+.

But because most tablets aren’t actually mobile – they stay at home or in the office – they don’t cause comment and therefore don’t act as social objects; so is the desire to upgrade to the very latest model less powerful?

And because relatively few people bother to make tablet optimised apps – a huge mistake in our opinion – is there less need to upgrade to benefit from the new version?

The Chinese are coming

At IAB Engage this week Martin Sorrell warned the audience that the Chinese are coming, and pointed out the size of Alibaba and the growth of Xiami as two examples. Fix readers know this and also that the size of BAT (Baidu Alibaba & Tencent) is based on a market where internet penetration is around half that of the UK, so lots more growth to come. Of course not having Google, eBay, Facebook and Twitter to compete with, helps this stellar growth.

But the really interesting thing about China is that this Galapagos effect – an ecology cut off from the rest of the world – has inspired some fascinating business models. So there is a lot to learn from China, other than merely the growth story.

As this chart shows the messaging apps across Asia are developing business models other than taking ads and it’s likely Snapchat will be amongst the first to monetise its reach as a platform for other content and services.

And whilst Jony Ives may think that Xiaomi are little more than copycats this HBR piece shows they have an innovative business model that may prove more resilient than Apple’s.

If you want to dig a little deeper on China this report from Campaign Asia is worth a look.

This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website

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