Why Mobile Advertising Fraud Is Costing You Big Bucks

Cybercriminals tend to go wherever the money is. So, it's not surprising that they are bombarding mobile marketers. As the mobile ad market adds billions in spending every year, hackers and fraudsters have found clever ways to siphon off huge sums.

The cost of app-install fraud was estimated at $2 billion in 2017. That figure becomes less surprising when you learn that around 40 percent of the total mobile app inventory is fraudulent. When real and fake apps have roughly the same footprint, it's understandable while mobile fraud is so successful.

The total cost of mobile ad fraud is estimated to be as high as $16.4 billion. That means fraud is not just an annoyance, it is a critical threat. To underscore that point, consider how many types of fraud today's apps are under attack from:

  • Basic Bots – Simple tasks like clicking an ad are automated and repeated on a huge scale.
  • Advanced Bots – More advanced bots mimic human behaviors and bypass many tools for detection and deflection.
  • Botnets – Large teams of bots are coordinated to make fake traffic look like real clicks or installs.
  • Click Farms – Large teams of real people perform repetitive tasks that are disguised to look like organic traffic. 
  • Invisible Ads – Fraudulent ads are hidden under real ads, basically piggybacking off whatever impressions the real ad receives. 
  • Ad Injection – When unauthorized ads are forcefully placed on a mobile interface in a way that they cover up ads placed by legitimate marketers. 
This list is not complete, and new forms of fraud are being developed all the time. Mobile ad fraud should be cause for alarm, but it's not a reason to admit defeat. There are steps marketers can take to proactively defend against fraud:

Acknowledge the Scope of the Problem

Hopefully this piece has opened your eyes, and further research on the scope of mobile app fraud is highly encouraged. Marketers cannot get serious about this issue if they underestimate how big it is. Remember that no marketing effort is immune, and the consequences cut deep.

Identify a Pattern of Fraud

Preventing future fraud depends on understanding past fraud. Using specialized DSPs that automatically detect mobile advertising fraud save marketers from throwing their pearls before swine, so to speak. Instead, these DPS can identify users (real users) who are mostly likely to engage with an app and participate in post-install events. Much better than advertising to bots, right?

Share Data

It's easier for marketers to spot instances of fraud when they have accurate and up-to-date figures about install and usage patterns. Simulating real human behavior is harder for fraudsters, so it's important to know how many actual users are on an app.

Flag Suspect IPs

You may notice that large amounts of fraudulent traffic are coming from a single IP. Record the number and be cautious about the IP in the future. There are tools that make combating ad fraud less of a burden, but marketers must still take a proactive and vigilant approach.

Get Everyone Onboard

Mobile ad fraud is an issue that affects everyone involved with your app, everyone in the app community, and ultimately every user on earth. The only ones who benefit are fraudsters. Creating a collective understanding about how broadly and deeply this issue affects everyone is essential for fighting back.

Mobile ad fraud is a problem that is going to get worse before it gets better. But as defenses improve, fraudsters will focus on where the largest vulnerabilities remain. The apps that remain unprotected will see the issue get worse. The apps that are already protected will see the bottom line surge.
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