eMarketer predicts that in 2019 mobile ad spend will surpass $93 billion — a full $20 billion more than what it expects will be spent on TV, but one of the biggest challenges to mobile advertising growth has been invalid traffic and mobile ad fraud such as fake installs and click spamming. This has significant impact on the app ecosystem.
We asked MEF Members and industry insiders to shine the spotlight on mobile ad fraud and ask what should the industry be doing to combat the fraudsters?
Michael Paxman, Product Communications Lead, adjust.com
Mobile fraud is rampant and the reason its so bad is because it’s actually very easy to do and because there is no punishment for doing it – there’s no regulation and if you get caught you move on to the next app. Until now the approach that has been taken is too hands off.
By making the cost of entry too high and the routes in too complex. Click validation for example makes it much harder for the fraudsters to get an actual pay out. Its how banks work – you can’t stop people robbing banks but you can make banks much harder to rob.
The ad networks, platforms and attribution providers have introduce measures which have had an positive impact, but along with the tech approach there also needs to be a more social, more knowledge based understanding of the problem and acknowledgement that you shouldn’t fund fraud to make your numbers look good.
Matthias Kirsch, Head of Products, freenet digital
Mobile advertising has grown tremendously over the recent years and will keep on growing in the years to come. As such, it became a big business, with hundreds of billions of dollars spent each year. And, wherever there’s money, there’s fraud. It is hard to measure the exact impact of the fraudulent activities but it’s a known fact that it costs the advertising industry billions annually. According to eMarketer, numbers range from 6.5 billion dollars to 19 billion dollars per year. This alone should ring an alarm bell to all of us in the industry and push us to create ways to combat this and to outsmart the fraudsters.
One of the biggest problems is that there are no regulations in place to punish this type of crime. Once a fraudster has been discovered, they would just move to another app or platform and continue with what they were doing before, maybe even with more zeal. And this needs to change.
The antifraud solutions that are currently available on the market are already quite amazing but as fraudsters get more and more creative, so should we. The software solution that we produce at freenet digital applies a myriad of strategies to detect fraudulent activities and to block fraudulent traffic from happening. Even though ad fraud might never disappear completely, we have a possibility and a mission to make it hard on fraudsters to continue their activity and the industry efforts in this regard should be multiplied to fight fraud.
Jennifer Burrington, VP of Sales, North America – Interceptd
“Fraud today is something that has shifted over time – there are simple fraud tactics that the fraudsters know that are “low hanging fruit” very easy to win the bounty for an install such as click injection, ad stack and click flooding – these are pretty standard tactics the fraudsters are using on a daily basis.
But now we’re seeing a shift into how their approach to fraud is coming – they want to become harder to detect – they’re doing a lot of fraud that is hard to detect through actions where they create a fake install though SDK spoofing and they make it look like a real user by having activity inside an app – really trying to fool the marketer and the attribution company that it is a real user.
The fraudsters are iterating and becoming more sophisticated in an effort to combat fraud detection tools, and so now we’re seeing at Interceptid the need to help marketers abate and mitigate this fraud through a myriad of fraud detection tools… The end goal is to help them stop the fraud and become more efficient with their marketing dollars and see better return on their ad spend.”
Gary Danks, Managing Director & Founder, Machine Advertising
In Q1 2019 we analysed over 30 million app installs from ad networks and we detected that the majority of them were fraudulent – so completely worthless.
The awareness of the problem of mobile ad fraud is very small and more needs be done to educate the market and we’re right at the beginning of raising awareness of the issue. The app marketing spend is growing 30 – 40% year on year and so understanding the value of your campaign – should you be paying for installs is critical given the ad spend involved.
Fiona Sellick, MD, The Nod
Its probably the biggest problem we’re facing right now as marketeers. I think that there are lots of people in the industry trying to fight it, and there are lot of great products out there that are breaking new ground in fighting it, but it is always going to be a case of “holding back the wave”… because it’s fraud, it’s criminal behaviour – when something is that profitable, people are always going to find ways to break the system and make money from it, so we need to be vigilant as marketeers and make sure we’re encouraging the industry to fight back.
One stat I heard today was one in three pounds spent in mobile marketing is fraudulent, so that’s a third of all marketing which is fraudulent, which is a terrifying stat. So the whole industry really needs to stand up and take note of that and put their heads together on how to fix this problem and fight it.
Ricardo Cidale, VP Americas, Syntonic
Mobile ad spending is now a big business; soon it will surpass all other forms of traditional advertisement. The popularity of mobile ads has attracted fraudsters looking to have a piece of the growing mobile ecosystem. Consequently, it becomes increasingly necessary to educate all stakeholders on the negative aspects of mobile ad fraud and develop strategies that will help curb the menace.
Mobile ad fraud consists of all the illegal activities that negatively impact the entire mobile ecosystem, including advertisers, publishers, and everyone in between. Ad fraud was estimated to have cost stakeholders about $19 billion in 2018. However, these numbers are likely underestimating the full cost; they only tally the rejection rates pooled from fraud prevention tools. There have been some steps taken to address the issue, but fraudsters have evolved and are now using sophisticated tools that make it harder to detect.
It is critical for marketers to understand the risks posed by ad fraud so that they can employ relevant regulation, education, and advanced technology to address the issue. Advanced technologies have become necessary, considering that most fraudsters rely on a vast network of bots which have the capability of mimicking human behavior without alerting the user of the device. Technology that relies on multi-point checking by using different data sources that prescribe ideal human behavior could prove ideal for detecting and preventing bot activity.
In addition to technology, stakeholders must change their mindset regarding the metrics that inform marketing campaigns. Educating marketers and other experts on the evolving nature of invalid traffic could ensure that all stakeholders keep up with the threat and take care of where and how their inventory is purchased.
In summary, it will take a coordinated effort of technology, standards, and process adjustments to mitigate ad fraud. Old-school collection of real user data could also inform how best to handle bots and other ad fraud techniques.
Florian Lichtwald, Managing Director, Chief Data Officer, zeotap
In addition to fraud due to bots, spiders and other actors, an often underestimated category in AdFraud is what we call systematic human fraud, which is generated by impressions served to consumers outside the target audience in a digital campaign due to inaccurate targeting data. Almost for all types of types of AdFraud the audience data used in digital campaigns plays an essential role in avoiding human fraud.
There is no doubt that the primary condition for digital advertisement to deliver outstanding results is to use high-quality data with the needed scale. However, the reality today is that the combination of quality and scale is difficult to achieve, and many advertisers have already experienced that there are very few data providers that can meet both conditions. On the one hand, some companies have high-quality data, but lack scale.
On the other side, there are those who use inferred or probabilistic data, taking a small sample of data and extrapolating it to the entire population and sacrificing quality by scale. Overall we can see highly conflicting incentives between advertisers and data providers in the market today. Advertisers want to use data to spend their budgets precisely on the right audience. Data Providers want to sell sizeable audience segments to increase spend on segments and therefore their revenue opportunity.
Advertisers should therefore look for “deterministic data”: a type of data that thanks to its origin and collection method is known to be real. The data is often ID-verified, such as when users sign up with their mobile operators or their banks. Other data signals are observed by technology and not further modeled before being used by the advertiser. Especially for behavioral data sets such as installed and used apps, specific websites visited or phone usage data is directly linked to the user’s ID and then represented in a transparent format.
It is not an easy task to find the best data in the market that combines quality/precision and scale. That’s why it is essential for advertisers to make an extra effort and work closely with their data providers. Firstly, I would recommend that they understand both the nature of the data and its collection methods since these two factors largely determine the accuracy of the data. For instance, the data that has been verified with the user’s ID and comes from trusted organizations such as banks, telecoms or e-commerce sites, will always be more accurate than inferred or probabilistic data coming from other sources. I would also suggest that they take the time to understand the internal processes that each data provider has implemented to ensure consistent data quality even when volumes increase. Data quality tests (both internal and external), data prioritization and data updates are some examples of the types of methodologies and processes that can help brand marketers making a final decision. Finally, another step that can be taken is to carry out database audits to determine the levels of attribute precision per provider, and to give full transparency and confidence to advertisers.
Ad fraud from fake installs to click spamming has significant impact on the app ecosystem from worthless campaigns paid for by marketers to millions of fraudulent installs that will never generate any in-app engagement or billing it’s a challenge for the whole mobile ecosystem.
In this webinar MEF members will explore what can be done technically and commercially to detect & prevent ad fraud and debate what as an industry should be done to raise awareness of this key issue