It’s likely that there are few marketers or advertisers out there who haven’t felt the chill wind of mobile ad fraud. It’s clearly a big problem and the industry is rife with discussions around its ever-growing drain on marketing budgets and the effect it is having on the accuracy of advertising analytics.
As the mobile industry has grown and advanced, so has the problem of ad fraud and it’s now very much a part of every-day conversation for marketing and advertising professionals. The rise of mobile marketing as an industry within its own right has also fuelled these discussions, proving an attractive channel for fraudsters to exploit. Yet, despite growing awareness and progress being made in the fight against fraud, it’s a problem that isn’t going away. Statistics paint a bleak picture about the effectiveness of current protective measures and the costs marketers are facing.
A £11 billion global problem
So, what exactly is mobile ad fraud? Mobile ad fraud has many faces, ranging from faked app installs, fake impressions, attribution fraud, click spam or flooding. Often, the aim of fraudsters is to exploit mobile advertising technology in order to steal from advertising budgets. One of the challenges with fraud is that, when done well, it mimics real world behaviour which makes it hard to identify unless powerful tools are in place to catch discrepancies and anomalies.
As with all types of fraud, it’s also often a game of cat and mouse between marketers and fraudsters. Mobile technology is constantly evolving and as the marketing industry ups its game, so too do the fraudsters, who are more sophisticated than ever before. The World Federation of Advertisers, whose members include McDonald’s, Visa and Unilever, has warned that digital ad fraud is ‘endemic’ and will continue to plague the industry despite widely publicised efforts to eliminate it.
This comes as no surprise when you look at the numbers. Estimates of ad fraud vary immensely but according to figures approximately £11 billion was lost in 2017, with this figure expected to rise again in 2018. With £100 billion spent on mobile advertising worldwide, that’s roughly £1 stolen by fraudsters out of every £10 spent by marketers.
Beyond stealing money away from mobile marketers, who are already struggling with high acquisition costs and user attrition, ad fraud also slowly undermines trust between marketers, brands and ad partners in the mobile ecosystem, resulting in additional costs for everyone involved.
App install fraud is one of the most prevalent forms of mobile ad fraud. Globally, it accounts for around 8% of all fraud instances, and last year it cost mobile marketers around £1.4 billion.
One prominent form of fraud, click injection, makes up a third of all mobile app install fraud. Simply put, click injection is the process by which bots, spiders and other non-human actors or malware installed on a mobile device, attempt to steal attribution credit for a genuine app install. A new sophisticated form of click-spamming involves a fraudster publishing a simple app (like a game, or a simple flashlight app) which uses broadcast techniques to ‘listen’ and identify when other apps are downloaded. The fraudster will then trigger clicks between when an install is complete and the app is opened. Consequently, they then receive the credit for the install.
The problem here is that a fraudulent click perfectly matches the real mobile user’s ID, meaning click injection fraud can appear legitimate, and when advertisers review their ad performance they get a false view of how their paid ad campaign is actually performing. Ultimately, this means that marketers continue to invest in advertising that may not be delivering for them as effectively as they believe.
Reversing the rising tide of fraud
Mobile ad fraud remains rampant, siphoning off marketing budgets and cheating everyone in the industry out of revenue and legitimate app customers. Left unchecked, this problem will continue to pose a significant threat to not only the reputation and relationships of brands, ad partners and marketers but to the future of the entire advertising ecosystem.
What’s needed is a new proactive and collaborative approach that combines people, technology and data. Education is key to ensuring teams and partners are aware of the different types of fraud and how to spot them. With click injection fraud, for example, it’s important to understand how to look at the bigger picture, viewing ad campaigns as a whole. There are visible nuances between normal human behaviour and abnormal distribution, so anyone who is aware of what to look out for can visually spot and remove bad traffic sources quickly.
Marketers should also look to create a database of blacklisted IPs. Once a publisher or a specific IP has been identified as fraud-likely, they can be added to this blacklist for future reference. All subsequent IPs belonging to the same hosting provider can then also be blocked.
The ideal solution would be to create and publish an industry-wide list that is neutrally maintained. This is something that is already being utilised by the global video advertising industry and it is this type of openness and transparency combined with a pooling of resources which needs to be replicated in the mobile ad industry.
Collaboration is the cornerstone
Beyond this, marketers need to equip themselves with the right tools and technology to detect and eliminate fraud. Until this point, the conversation around fraud between marketers and ad partners has been hostile. To combat fraud such as click injection efficiently, it needs to happen at attribution level. What’s needed is a neutral attribution solution that makes it possible for both marketers and their partners to analyse app install traffic for potential fraud and work together to pinpoint suspicious activity down to the sub-publisher and sub-campaign levels. This type of system means that advertisers and ad networks, marketers and their partners view the same set of data and rules. Think of it like comparing apples to apples, rather than apples and bananas. This allows for open conversations between the two sides, and most importantly occurs in real time if there is a ‘red flag’ situation.
Demand for fraud prevention is increasing as advertisers become more aware of the risks of fraudulent activity. Progress is being made but we’re still some way off from reducing fraud to a more manageable level. As the impact of mobile ad fraud, whether it’s on revenue or reputation, continues to wreak havoc in the businesses of all industry players, collaboration and transparency will be the best weapons in the fight against the fraudsters.