In 2017, the advertising industry got serious about digital brand safety after a push from Procter & Gamble and a major boycott of YouTube by advertisers over ads appearing with offensive content. While platforms and agencies have been working to clean up their act in some countries, they’re behind in one crucial market: China.

L2 worked with China-based ad verification company Adbug to track the instances of ads showing up on questionable content, and the results are jarring. It turns out that 38% of all Index CPG brands with advertising had at least one ad that was exposed to unsafe content in China in the past year. And it’s not just a case of a few ads slipping through the cracks: for example, half of all creatives by both Omo and Moony ended up on unsafe content such as pornography.

“Brand safety is an even bigger problem in China for advertisers than in the West as brand safety was never talked about until recently,” says Adbug Founder and CEO Martin Zhang. In addition, “many fraud issues that brands are concerned about,” such as bots used to create fake view counts, “are often co-occurring with brand safety issues.”

This information comes at a time when companies are getting smarter about where their ads are appearing and who’s actually seeing them in other markets such as the US or the UK. In January, Procter & Gamble Chief Brand Officer Marc Pritchard sent shockwaves through the advertising industry when he stated that it was time to clean up a media supply chain that was “murky at best, and fraudulent at worst.” He announced that Procter & Gamble—the world’s largest advertiser—would review all of its contracts and adopt standards established by the Media Ratings Council (MRC) for ad viewability, as well as require third-party accredited verification. Last quarter, the company followed through on its threat to stop hiring companies that didn’t meet its standards, cutting ad spending by $140 million.

But an L2 analysis of Adbug data found that not a single Procter & Gamble brand uses ad verification in China, where problems are rampant. In fact, no Index CPG brands have ad verification in the country. Out of 346 Index brands across multiple industries including CPG, beauty, and luxury, the only brand that has adopted ad verification is Tommy Hilfiger.

According to Zhang, there are several key reasons brand safety efforts are lacking in China. “Some brands might think premium buying models such as CPD or direct buy guarantees brand safety as the inventory is supposed to be higher quality,” but these models are actually causing “even more brand safety and fraud problems.” He says a main problem is the “disassociation between branding teams and media buying teams” for foreign brands. “Frankly, local media buying teams of Western brands do not care so much about the upkeep of brand values. Instead, they’re more concerned about bargaining to buy cheaper media inventory to reach targeted prospective KPIs,” he says, saying that Chinese brands have been more successful at syncing with agencies on the issue.

China’s ad industry has made some progress in addressing the issue. In January, the Mobile Marketing Association (MMA) China followed in the footsteps of the MRC by forming a Brand Safety & Viewability Standard Group, and announced the first set of standards for ad verification on mobile devices in China in May.

There are several key things brands need to do to clean up their digital presence in China. “To prevent the irreversible loss of brand value in China, brands have to use effective protection when advertising on PC and mobile immediately,” says Zhang. “It is important to choose a local vendor that offers products specifically catered to China, because brand safety is a cultural and contextual issue.” Brand safety verification companies need to be skilled at analyzing Chinese-language content to recognize categories beyond what IAB suggests, and address server speed issues on the viewability front. According to him, the time to address this is now. “Brand advertisers need to get on this right away to prevent further damage and consult experts in the local market.”

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