Rampant click fraud on China’s internet hurts digital advertisers

January 20, 2018
Industry News
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Yujing Liu
yujing.liu@scmp.com

China’s US$50 billion online advertising market hurt by a flood of fake clicks that are facilitated by broadband internet and cheaper smartphones

Retail giants like P&G and Unilever invest billions of dollars a year in advertising on China’s digital media platforms in the hopes of reaching the country’s 1.4 billion consumers, but one in three “hits” are generated by banks of mobile phones programmed to visit their websites to give the false impression of higher traffic volume.

This fake web traffic, which accounts for one third of advertiser views in China, is generated by so-called click farms which use powerful computers to control thousands of mobile phones, or hack into other smartphones through malicious apps to do the same, according to a report by data service provider AdMaster.

A separate study by consulting firm iiMedia Research found that more than 80 per cent of the operators of public accounts on Tencent Holdings’ platform WeChat, akin to verified pages on Facebook, were victims of fabricated clicks at one time or another.

“Advertisers absolutely abhor click fraud,” said Hong Bei, founder and chief technology officer at AdMaster.

The rampant click fraud underscores the challenges faced by advertisers and brands in China, the world’s second largest advertising market, where the online advertising market has been growing exponentially along with the internet economy in recent years. China’s online advertising expenditure surged from US$24 billion in 2014 to US$50 billion in 2017 and is forecast to reach US$84 billion by 2020, according to eMarketer.

At the same time, the cost of fabricating clicks has come down significantly because of broadband, 4G mobile service and cheaper smartphones, according to Hong.

“In the past, we have detected more than 100,000 phones that kept accessing a website from the same geographical location in Shanghai for a whole day,” he said.

Click farms charge less than 50 yuan (US$7.50) to buy 1,000 clicks for articles published on public accounts on WeChat, China’s most popular social media app. Continue Reading 

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