What marketers need to know about mobile ad fraud

Mobile ad fraud continues to be a detrimental problem for marketers and the entire digital advertising ecosystem. For those not familiar, mobile ad fraud happens when an individual or group attempt to defraud advertisers, publishers or supply partners by exploiting mobile advertising technology. Their objective is to steal from advertising budgets.

From faked impressions, click spam or faked installs, mobile ad fraud can take a number of different forms. Recently, it prompted Google to issue refunds on its fees to advertisers whose ads reached bots rather than humans. And as the industry evolves to fight this fraud, so too do fraudsters methods change and improve; it has costly, with estimates hovering anywhere from US$7.2 billion to US$16.4 billion. By 2025, global ad fraud costs could reach $50 billion annually, the World Federation of Advertisers (WFA) said earlier this year; which is second only to the drug trade as a source of income for organized crime.

What marketers need to know about mobile ad fraud

Mobile can be a particularly challenging environment in which to track fraud, since tools that are used for the desktop aren’t necessarily applicable to mobile devices. In fact, ad fraud is twice as high on Android devices as it is on iOS smartphones and tables, according to a recent report by Datavisor. The countries with the highest rates of fraudulent installs are the US, Indonesia and China.

Why does mobile ad fraud happen?

Mobile ad fraud presents a significant opportunity to make money quickly, though illegally. When mobile content production slows, both audience and advertising demands grow. This creates a vacuum that fraudsters can fill. Advertisers find space increasingly limited to use their larger budgets, which becomes money which can fall into the hands of fraudsters. And with a lack of industry action in combating fraud, that means that criminals are less likely to be caught.

As mobile marketing continues to grow, fraudsters are increasingly going after mobile as app-install revenues. App install fraud occurs when fraudsters fake app installs, falsely claim credit for legitimate app installs, or use malicious apps to download real apps onto real users’ devices without their knowledge. Some advertisers turn a blind eye to mobile-install fraud, because the paid installs for purchased apps, though fake, still boost their App Store rankings. This is important, because a higher ranking on the App Store helps drive real, non-fraudulent installs.

Types of ad fraud

  • Click fraud: fake click, genuine user
  • Install fraud: fake click, fake user
  • Compliance fraud: genuine click, genuine user, wrong user geography/profile/etc.

In addition, there are multiple kinds of non app-install mobile ad fraud, including:

  • Viewability fraud: stacked, off-screen, not viewable
  • Targeting/compliance fraud: served to real people, but not the audience a marketer wants
  • Bot fraud: served to bots or software agents, not real people; the bots may or may not click (tap) on the ads

Prevention starts with you

So what can you do? First, get serious about fraud education and get up to speed on the different types of fraud with special attention to mobile. Are you seeing ROI from your ad spend? When advertisers pay for a service, they have a legitimate right to expect to get what they paid for. It’s also critical for buyers of all kinds of goods and services to periodically validate that they are getting what they were sold.

What marketers need to know about mobile ad fraud

There are attribution and analytics sites offer tools to help marketers identify and prevent fraud. These tools may use signals like IP addresses, click and install pattern detection, and activity monitoring to pinpoint campaigns, partners and buying models that are driving suspicious app installs. Make sure the partners you work with are helping you fill in the gaps.

Another recommendation is to register with TAG, the marketing industry’s Trustworthy Accountability Group, to become identified as a trusted business partner.

For more advertising tips, learn how to market with a smaller budget.