Major insurer Sompo Japan Nipponkoa has joined hands with Momentum, a high tech digital advertisement company located in Tokyo that provides ad verification and ad fraud services, to offer ad fraud insurance. This is reportedly the first such plan in the country.
The two parties are set to start offering the insurance next month.
Under the plan, the advertising agency offers a guaranteed ad fraud index (percentage of ineffective advertising) to the advertiser. Refunds are given if the ad fraud index exceeds the initially set threshold. The refunds are covered by the insurance policy.
To buy this insurance, advertising agencies need to control ad fraud, so it is a prerequisite to use Momentum’s dashboard service to detect and analyse risks.
Ad fraud is the practice of creating fake ad traffic to increase revenue. The fraudulent activity is carried out through various means including bots and click farms.
As technology evolves, fraudulent advertising and third-party ad fraud have increased, raising the risk of ineffective advertising. In Japan, ad fraud rates were estimated to have ranged from 8.6% to 19.2% in 2018.