Mobile advertising fraud is on the rise. According to the Association of National Advertisers it will cost the industry $7.2 billion in fraudulent clicks and bot-generated traffic across both mobile and desktop properties.
The US, Indonesia and China are the countries with the highest rates of fraudulent installs. And when it comes to operating systems, Android accounts for 70% of fraudulent app installs compared to 30% on iOS.
But what exactly are the different types of advertising fraud; and what is the industry doing to combat mobile ad fraud? Mobile advertising and monetisation network Mobvista has provided a comprehensive Anti-fraud Whitepaper to answer all of these questions.
Let’s start with a definition. What is mobile advertising fraud?
Charles Xi, President of Mobvista US, explains that term “describes the methods that some less reputable ad networks use to generate revenue through falsely triggering ad impressions on mobile websites and apps.”
Fraudsters inflate the performance of their ads by using fake views, clicks or installs. Advertisers and ad networks still have to pay for that traffic.
The different types of advertising fraud include impressions, clicks, conversions or in-app activity and installs – anything that generates revenue for a fraudster. In addition, there is attribution fraud.
“The end goal with attribution fraud is to be attributed for the purchase, rather than the legitimate campaign that originally prompted the purchase,” Xi says.
The problem is one of sophistication: although most advertising fraud is still crude as it relies on programmes, increasingly sophisticated measures are being installed.
As an example, the Methbot hack by Russian fraudsters in 2016 made ad exchanges believe that fake websites were premium ones, generating estimated advertising losses of up to $5 million per day. Xi adds:
“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.”
So what is currently being done to combat advertising fraud?
According to Google, advertising fraud is now a part of digital advertising although the company continues to remove fraudulent ads. In 2016, Google removed 1.7 billion adverts for a variety of reasons including fraud – twice the number it purged in 2015.
Xi says that one of the most important things advertising companies can do is analyse their data to track all campaigns and everything that is going on.
“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.”
It all comes down to implementing the right algorithms to manage the data and check for anything suspicious or abnormal within. However, it still requires the human touch to assess if ads really are fraudulent or not.
Although Xi is optimistic, he points out that ultimately money is what keeps fraud going.
“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.”
Mobile advertising fraud is certainly becoming a much more hotly debated issues among companies and advertisers. Indeed, 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) have all announced transparency measures to boost anti-fraud practices.
“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.”