A New Risk on Mobile
A lot of attention has been paid to the problem in the digital advertising industry that is posed by ad blocking software. I know because I'm one of the people paying that attention. But now, an entirely new problem for digital advertisers is now on the rise: Digital advertisement fraud.
We covered this problem before when news of an extensive botnet targeting high-value customers was revealed to have defrauded digital advertisers of billions over the past few years.
Now Lauren Johnson of AdWeek has a new article out, "Everything You Need to Know About the Current State of Mobile Ad Fraud," covering the newly studied extent of digital advertising fraud in the mobile ad market. And the numbers are pretty frightening.
Johnson covers a new report from Forensiq and AppLift that found that 34% of mobile ads were at risk of fraud. Digital ad fraud, and its vocabulary of "zombie ads" and "bot nets" may seem foreign and unfamiliar, but the problem has exploded in recent years. It is to the point that estimates put losses due to ad fraud into the range of billions of dollars per year.
The report examined 60 million mobile ad impressions over 30 days this fall, scoring each one for possible risk of fraud. It found that, of the bogus traffic, 12% was considered "high risk" or "high certainty" of it being fraudulent, with another 22% considered "suspect."
Another surprise was that, despite Apple's reputation for being free from things like viruses and fraud, the fake ads appeared on Apple and Android devices in equal measure.
How Its Done
According to the report, Cost-Per-Thousand ads were at a much higher risk of being fraudulent than Cost-Per-Click ads, most likely due to te more complicated nature of the Cost-Per-Click ads.
The most common forms of fraud are post-install, impression fraud, click fraud, and install fraud.
Post-install fraud is a complex ruse that occurs "when fraudsters sneak into apps after an advertiser has run a campaign promoting app installs." They often use stolen credit card data to buy apps and/or make an extensive number of in-app purchases.
Impression fraud is when multiple ads are stacked on top of each other on a web page. Only the ad on top of the page is visible, but all advertisers are charged for the impressions. Another form of this is the hacking of apps so that they are always open, even in the background of an operating system, simultaneously racking up false ad impressions while consuming massive amounts of data.
Click fraud is the most straightforward form of fraud where bots are employed to create clicks on ads. While the same problem exists on desktop browsers, but on mobile there is the additional problem of fake pop up ads that require a click to remove and drive up numbers through force.
Install fraud is where hackers simulate app downloads that are never actually purchased by a consumer.
How Do We Fix It
As dangerous as all these forms of fraud are, solving the problem may simply be a matter of time. A big part of the reason that there is more of a risk of ad fraud on mobile than desktop is simply because, according to Johnson's interview of AppLift CEO Tim Koschella, desktop has been around longer. "The market has learned over time how fraud works [and] how to fight it" on desktop.
No such luck with mobile so far, but hopefully in the future marketers will be able to better weed out fake ads and other forms of fraudulence. Like computer viruses, we'll probably never be completely free of fraud, but we can certainly do better than we are right now.