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Reality check: Mobile ads are not immune to fraud

The omission of mobile from previous reports into ad fraud may have lulled mobile marketers into a false sense of security, but they’re in for a rude awakening.

Three years ago, mobile ad fraud was in single digits. Fast-forward to today and it has dramatically increased in-line with other devices. Fraudsters have not limited their target to desktop alone – with the ubiquitous adoption of mobile, it was only a matter of time before performance mobile marketing came under attack, affecting metrics such as downloads, installs, and cost-per-install (CPI).

Mobile fraud is on the rise and the effects are being felt by advertisers, media owners, and even consumers. eMarketer estimates that US mobile ad spend will reach $42 billion in 2016, significantly higher than desktop’s estimated ad spend of $25 billion. Far from being immune to the fraudsters, new research indicates that over a third (34%) of mobile programmatic traffic is at risk of fraud, a figure that will only grow as mobile ad spend continues to increase and demand for mobile inventory soars. As technology develops to combat this issue, fraudsters will work to stay one step ahead, implementing more sophisticated techniques such as mobile device hijacking – mobile apps that rapidly load hidden ads and emulate human behaviour – that already impacts up to 3% of mobile devices in Europe.

One of the most prominent types of fraud we’re seeing affect mobile is user acquisition fraud, with techniques including fake installs, stolen attribution, and botnets.

Originating from desktops, where aspects of the device are spoofed, fake installs mimic the characteristics of mobile. In addition, fraudsters can use virtual machines and proxies to deliver this type of mobile app fraud.

On a par with cookie stuffing for desktop, stolen attribution is where fraudsters misappropriate where the attribution of an install originated. There are a number of tactics where this is used including background redirects to other apps, as well as faked or spoofed clicks.

Botnets emulate engagement within the app and the marketer is fooled into believing that it’s a legitimate install, and in turn, pays the marketer – money that actually ends up in the hands of the fraudsters.

There are some dissenting voices claiming that botnets are not a serious threat in the mobile ecosystem. This is completely untrue. Botnets represent a real threat to the entire ad marketing landscape, through device manipulation, proxy fraud, and fraudulent mobile attribution. The scale is also considerable with nearly $1 billion found to be de-frauded through mobile device hijacking alone.

So how can marketers safeguard their mobile ad campaigns against fraud – now and in the future?

It’s essential to secure a fraud detection layer and share the data with partners and affiliates. They in turn should be encouraged to remove suspicious sources and enforce strict guidelines within their Terms and Conditions. Media owners must take responsibility to ensure they’re not buying third-party traffic and look for any obvious anomalies in reports, for example discounted offers for price per volume may be cause for concern. Low conversion rates can also be a clear sign of non-human traffic, and should be investigated. The best advice would be to only work with reputable partners, and choose those that already have processes and technology in place to prevent and isolate fraudulent activity.

If fraudulent activity is identified then the ability to take action in real time is essential to block the traffic. The benefits of monitoring traffic include fewer time-consuming arguments with affiliate partners and only being required to pay for legitimate installs.

As well as faked installs, marketers should also be aware of faked engagement – a key KPI used to measure traffic quality – by monitoring which users engage meaningfully with the app and go on to convert. What’s clear is that the environment is constantly evolving – it’s essential to keep up to date with fraudulent detection in place, as once one fraud technique is identified and tackled a new tactic is sure to be developed.

The worrying fact is that this is just the beginning of mobile ad fraud. As mobile usage continues to overtake desktop, coupled with the increase of ad spend in mobile – both web and in-app – the prevalence of fraud will undoubtedly grow. As the process becomes more automated, with the rise of programmatic, it will become easier for fraudsters to hide. As an industry, steps need to be taken to ebb the flow now.