An Incomplete Guide to Combating Mobile Ad Fraud

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Posted: September 27, 2017

Charles Xi, Vice President of Mobvista’s US office shares what mobile ad fraud is, and what the mobile advertising industry doing to combat it. To read more about ad-fraud and how to fight it using anti-fraud technology, you can read Mobvista’s white paper here.

What is the ad tech industry doing to combat ad fraud?

In August, Google announced that it was issuing refunds to hundreds of advertisers. The reason? It had unknowingly been running ads on websites with fraudulent traffic generated by automated bots. As part of its damage limitation, Google was quick to point out that the refunds represent only a small portion of the original campaign spend. However, this has demonstrated the ongoing problem with ad-fraud.

Ad fraud is an issue that impacts everyone in the industry, on both desktop and mobile. Last year Google purged 1.7 billion bad ads – more than double the number it caught the year before. Google readily admits that ad fraud has become an ever-present part of digital advertising, with fraudsters and ad tech companies locked in a battle for supremacy.

What is mobile ad fraud?

Mobile ad fraud is something of a catch-all term. It describes the methods that some less reputable ad networks use to generate revenue through falsely triggering ad impressions on mobile websites and apps. By deliberately creating fake views, clicks or installs, these fraudsters artificially boost the performance of their advertising, taking money from advertisers and legitimate ad networks, and giving consumers a substandard experience.

As well as showing false impressions, forms of ad fraud include fraudulent clicks, conversions (customer acquisition) or other events – such as in-app activity or installs – that generate revenue for the fraudster. There is also attribution fraud, where bad ad platforms try to identify end users who are close to making a purchase and target ads at them. The end goal with attribution fraud is to be attributed for the purchase, rather than the legitimate campaign that originally prompted the purchase.

Much of the fraud that happens today is relatively sophisticated. But some of it is incredibly crude, relying on people rather than programmes. When fraudsters need human help, they recruit low-paid workers, tasked with something as simple as downloading the same app over and over again, in an effort to increase its store ranking. So it’s literally farming clicks and installs.

A $7.2 billion problem

Last year, the Association of National Advertisers estimated that fake traffic and bot-generated clicks cost the advertising industry $7.2 billion across mobile and desktop. Ad fraud is big business, and a major focus for organised criminals.

For example, in December 2016, a major story broke revealing that Russian fraudsters were using a hack called Methbot to trick ad exchanges into thinking fake websites were in fact premium websites. A report into the hack by security firm White Ops showed that advertisers were losing $3 to $5 million per day to the Methbot fraud.

I believe that most advertisers are aware of ad fraud – but don’t appreciate the scale of the problem. The truth is that any campaign of significant scale is at risk of fraud, and it requires joined-up thinking on the part of advertisers, ad networks, attribution partners and other players in the ad ecosystem to coordinate our efforts.

Techniques to fight fraud

The most fundamental thing ad companies are doing is analysing mountains of data to track exactly what is happening. In the case bot-based click fraud, there are certain patterns that allow suspect activity to be filtered and quarantined. The same is true with IAP fraud, which can be detected and blocked quickly once detected.

IP Filtering is another tool used by attribution companies and networks that are trying to prevent fraud. This examines where traffic is coming from, meaning you can block IP addresses and other sources where fraud is originating from.

With native advertising things are slightly more complex, as distribution modelling looks deep into data to identify trends and patterns in data to prevent native traffic being stolen by bad ad sources. Distribution modelling works through the identification of trends in behaviour to understand how things like click-to-install time varies by app type and ad platform. This builds a detailed contextual picture, so that if behaviour seems too fake, the ads are likely bad.

These are just a few of the many techniques already in use. Fighting fraud boils down to intelligent algorithms that can crunch huge amounts of data and looking at anomalies, as well as a massive human effort in assessing whether ads are fraudulent or not.

Stronger together?

Ultimately, ad fraud is going to happen until such a time as there is no money in ad fraud. The challenge – as with any part of life where fraud occurs – is that where there is money, there is motive. And there is a lot of money in mobile advertising.

So it’s good news there are more companies than ever focused on trying to fight it. In the last year alone the American Association of Advertising Agencies (4A’s), the Association of National Advertisers (ANA) and Interactive Advertising Bureau (IAB) created the Trustworthy Accountability Group (TAG) to enhance accountability and transparency in the digital ad industry.

TAG works collaboratively with companies throughout the digital ad supply chain to eliminate fraudulent digital advertising traffic, combat malware, prevent internet piracy of content and products and protect the integrity of the digital supply chain.

Elsewhere, mobile tracking and verification company AppsFlyer  announced a new initiative in May 2017 that will look at what is happening on over 2,500 ad networks and try to stamp out fraud.

In fact, out of those ad networks and thousands of other companies involved in mobile advertising, a vast majority are working to fight fraud. Advertisers, mobile measurement platforms, ad platforms and other anti-fraud tech service providers are starting to band together on fraud. You could say there’s a growing ‘anti-fraud fight club’. It doesn’t matter where in the mobile ad value chain a company is, fraud impacts the whole industry.