APAC consumers are spending more of their media time on mobile — and the fraudsters are in hot pursuit.
According to the latest data from We Are Social, there are 4.3 billion mobile connections in APAC. That is a staggering 102% penetration rate when measured against the region’s population of 4.2 billion, and an increase of 8% from the previous year. Notably, there is still plenty of room to grow, as active mobile social users account for just over 1.7 billion, reflecting a penetration rate of 41%. Globally, more than 200 million people got their first mobile device in 2017, and two-thirds of the world’s 7.6 billion inhabitants now have a mobile phone.
Inevitably, the advertising dollar is following suit. Mobile advertising will contribute 30.5% of worldwide ad spend by 2020, up from 19.2% in 2017. The APAC region, in particular, is set to account for 43% of all new global ad spend dollars by the end of that period. But the mobile app advertising market isn’t immune to growing pains. And one of the biggest concerns centres around fraud.
In recent months, we have seen in the broader digital advertising space the benefits delivered by the Interactive Advertising Bureau’s (IAB) ads.txt project. Ads.txt stands for Authorized Digital Sellers and is a simple, flexible, and secure method that publishers and distributors can use to publicly declare the companies they authorise to sell their digital inventory. This public record has undoubtedly helped create greater transparency, boosted publisher control of their inventory, slashed the opportunities for counterfeiting, and enhanced brand confidence. But one significant gap in ads.txt has lingered: the lack of coverage for mobile apps.
This needs plugging because, on the back of booming mobile use, in-app advertising alone is set to triple from USD$72 billion in 2016 to $201 billion in 2021, according to App Annie. And APAC, which is growing at a rate of 25% in compound annual growth rate (CAGR), is set to outpace other regions when it comes to in-app ad spend. By 2021, this will total over $77 billion — a three-fold increase from 2016.
Unfortunately, this growth has come hand-in-hand with a rise in counterfeit inventory that threatens the industry. Although many programmatic advertising platforms such as Smaato combat this with a combined approach of technology and in-house market quality teams, the industry can still go beyond these protective measures and do more to prevent mobile app inventory fraud. The IAB's much-anticipated mobile app support for ads.txt would do just that.
A consultation document released by the IAB earlier this year provided guidance on how mobile app developers would be able to use web domains to host ads.txt files and, crucially, how buyers can look for them. As IAB’s Dennis Buchheim said, ads.txt and ads.cert, which authenticate ad space by using cryptographic security technology, “offer a one-two punch in combating ad fraud, and their benefits should go a long way in protecting brands and publishers in in-app environments.”
To continue the boxing analogy, it is now vital that this new regime is rapidly adopted by app publishers to deliver a knock-out blow to the fraudsters because brands and agencies must be confident their investments are finding their way to the real contenders.
The desktop video ad space has already benefited greatly from ads.txt and mobile apps would be able to reap similar benefits if adoption is swift. A recent experiment by The Guardian, Google, and MightyHive sought to determine how much of the inventory on ad exchanges purporting to belong to The Guardian was legitimate. When The Guardian lifted ads.txt filters from ad buys, it found that an astounding 72% of video ad spend went to unauthorized programmatic platforms.
The message that sends is loud and clear: Set against the context of ever-growing mobile usage, soaring mobile app ad spending, and the desire of fraudsters to cash in, the entire industry needs to unite behind ads.txt to protect brands and their consumers.
Today’s mobile advertising world is all about transparency, and the new ads.txt specification for apps will provide crystal clear, end-to-end visibility for the entire chain. While mobile supply-side platforms are ideally positioned to lead the way in exacting this change, all of us in the industry have to buy into it in order for it to be effective and sustainable.
It is time to come together and close the app gap for good.
Alex Khan is managing director, APAC at Smaato.