News

AppNexus’ Sonal Patel: ‘Click fraud has brought Asia’s programmatic industry into disrepute’

Asia’s burgeoning programmatic industry is facing a “day of reckoning” after being dogged by years of chaos and clickbots, the head of AppNexus for Asia-Pacific has said.

Sonal Patel, the company’s regional managing director and vice president, said the regional automated buying market was becoming “healthier” in Asia despite widespread concerns about ad fraud and click farms.

Speaking to Mumbrella Asia following Procter & Gamble’s recent decision to cut US$100 million in digital adspend, in part due to click fraud, she said: “One of the negativities Asia faces from a legacy point of view is that the market was unknown for many years to buyers from overseas, including North America and the EMEA region. There were a lot of clickbots and click-fraud that happened out of our region. That hasn’t helped and has reinforced some particular buyers’ views around the sorts of publishers they want to buy from – rather than just simply doing programmatic buying.

“In our industry, we do still get to an extent some of these click farms happening and they can cause disrepute and confusion in the market place. When you see an increase in e-commerce, you tend to see an increase in ad dollars flow in because people want to buy as many users as possible.

“We’re seeing that trajectory in this market place now: you have Redmart, HonestBee, Amazon Prime has just come. And with this cash flooding in, we have seen an increase of this click fraud and even the fake news has started to increase again. We have turned a corner, but there’s some way to go.”

She added: “I’ve been [in Asia] nine years and in the last four or five, things have become much healthier…. The ecosystem is better, but there are still challenges in the market place.”

Formerly the regional head of business development for MoPub, Twitter’s mobile ad server, Patel has had an extensive career in digital marketing, working at Google, Buddy Media, Yahoo, Expedia and the demand-side platform Adgile. After joining AppNexus in April 2016, the company filed for an IPO with a reputed valuation of US$2 billion.

Shortly thereafter, the startup cut 150 jobs in a restructuring that saw 13 per cent of its staff laid off, although Mumbrella Asia understands that AppNexus’ APAC offices in Singapore, Sydney and Tokyo were only marginally affected.

Patel was unable to comment on the IPO, but said “a tipping point” was imminent in terms of consolidation within the ad tech arena.

She said: “There’s a confusion about the technology: who is the vendor? What is the differentiator? What is a DSP versus a DMP, versus a SSP versus an ad-exchange? You start realising there’s chaos and mayhem in this industry. CMOs have so much to think about when it comes to the right types of buys with all the partners in ad-tech.”

“We’re going to get to a tipping point in terms of ad networks buying other ad networks, trying to form an uber network. You’ll have demand-side platforms trying to buy a supply-side platform because they want to be bigger than just one point solution: they want to be a single platform. This is going to cause even further confusion, until we get to a point where we get just a handful of platform partners, like Oath or Singtel with Turn and Amobee.”

Singtel and its subsidiaries have spent more than US$1 billion in advertising technology since the telco first bought Amobee in 2012. Most recently, the Singaporean giant bought technology firm Turn for US$310 million.

Elaborating on telcos such as Singtel and Verizons’ ad tech ambitions, Patel said: “This is a tough spot: telcos have seen declining revenues. The SMS period was hugely profitable, but now you get to the [mobile] data space, which has become a commodity beyond their control. A user can go out of a telco’s ‘safe zone’ and go into any publishing site and a telco cannot monetise beyond that.

“And now these telcos are buying up technology companies: this makes sense but when you own the tech companies, you have to be responsible for the data you are providing that company. When you work with a third party, at least when you give them your data, the onus is on them how to use it. But accountability becomes more linear when you own that company.”

She added: “There are privacy questions. The European Union is currently leading the [privacy] charge with the General Data Protection Regulation (GDPR): a lot of people are waiting for them to lead the way. I find that refreshing.”

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing