On average, US companies set aside 9 percent of their revenue for marketing budgets. In 2021 alone, businesses spent a staggering $521.02 billion. By 2026, this figure is predicted to increase to $876 billion. As a result, criminals have begun eyeing up this money, causing ad fraud to grow exponentially.
Today, fraudsters are doing everything they can to get their hands on marketing budgets. Yet preventing them from doing so is simpler than it might seem. Read on to find out how.
What is mobile ad fraud? A brief history of how it began
Online criminals are now making a lot of money through mobile ad fraud. In 2022, ad fraud cost the industry $81 billion and was estimated to reach $100 billion by the end of 2023. Out of everywhere, the Asia-Pacific region was the worst affected, losing $75 billion in 2022.
As these figures indicate, ad fraud is growing. Moreover, fraudsters are using an increasing number of sophisticated methods to rob companies of their marketing budgets.
From using fake traffic, clicks, and installs to deceive advertisers and ad networks, these cyberpunks are employing various methods to fraudulently receive attribution credits.
Consequently, marketers and/or advertisers unaware of these techniques end up paying them even though the clicks and installs they say they’ve received are fake. To do so, these fraudsters are exploiting mobile advertising technology. What’s more, it’s not always easy to tell who you can trust. For instance, although publishers are generally the victims of ad fraud, they can also perpetrate it too.
The world of ad fraud is a dangerous place to navigate, where criminals ensnare their victims via mobile apps and web browsers. Aside from draining resources, mobile ad fraud also pollutes data, making it difficult for advertisers to make the right decision because of inaccurate information.
Until the early 2000s, online fraudsters largely focused their efforts on search engine manipulation and desktop-based click spamming. After the introduction of the Apple App Store in 2010, however, criminals started employing mobile ad fraud, too, as consumers began using mobile phones to access information and shop.
And as suggested, the techniques these fraudsters have developed are now sophisticated that it’s no longer easy to know if a publisher is legitimate or not. Nowadays, it’s easy to create media sources and publisher accounts, so fraudsters have taken advantage of this, using shell companies and masking techniques to defraud advertisers.
Learn more about “Everything you need to know about mobile ad fraud.”
Common types of mobile ad fraud
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As suggested, today’s online fraudsters are using a variety of methods to cheat advertisers and ad networks of their money. Fake bots or users are the number one method that attackers use to defraud advertisers and account for almost 56 percent of all mobile ad fraud. The second most common type of ad fraud is Software Development Kit (SDK) spoofing.
Continue reading to discover the most common types of mobile ad fraud:
Emulators and bots
Here, cyberpunks use bots and emulators to execute various types of mobile ad fraud. Fraudsters can run them on almost any device, causing confusion among advertisers as these emulators are indiscernible from genuine smartphone users.
A bot is a web robot. Fraudsters use them because they can perform any task repeatedly and automatically. Compared to humans, they can carry out different tasks with greater frequency. Cyberpunks program bots to generate fake clicks, installs, views, and in-app activity.
Using these emulators and bots, online criminals are able to generate fake clicks and app installs, all without ever using a real device. By fabricating users and creating fake attribution, they are fraudulently able to claim advertising credits.
Software Development Kit (SDK) spoofing is another type of bot-based ad fraud. In this technique, fraudsters use real devices to generate fake installs or in-app events.
They carry out these actions by concealing malware in an app. Advertisers subsequently pay SDK-spoofing criminals huge amounts of money, as everything looks legitimate on paper.
Device farming is also known as ‘click farming’ or ‘phone farming’ and is where fraudsters carry out various activities that, to advertisers and ad networks, often look legitimate but are actually far from it.
In device farming, criminals employ people to perform in-app activities, fake installs, clicks, and other actions on numerous devices.
And since it’s so easy, it’s often one of the routes online criminals pick to make big money online.
Also known as ‘attribution fraud,’ ‘click flooding,’ and ‘organics poaching,’ click spamming is a unique method of advertising fraud. Attackers employ it to receive credit for organic installations that never actually took place.
Instead, click-spamming criminals execute clicks on other people’s devices without the owner’s permission or knowledge. This type of scam normally commences when a real user unwittingly visits a fraudster’s webpage or uses one of their apps. In doing so, the fake app or website generates clicks, views, and other actions without the user knowing.
By sending vast volumes of genuine-looking clicks to a Mobile Measurement Platform (MMP), these criminals attempt to receive attribution for these fakes installation or clicks fraudulently. And that’s how they make money by tricking advertisers and ad networks through click spamming.
While the many different types of mobile ad fraud can seem intimidating, there are also various ways to tackle them. What’s more, detecting and preventing ad fraud can help businesses save advertising budgets from criminals.
Learn more about “10 types of mobile ad frauds you should know about“
Proven techniques to identify mobile ad fraud
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Now that you understand how fraudsters cheat advertisers, marketers, and ad networks, here are some of the best ways to detect and prevent advertising fraud.
Only use trustworthy ad networks
Today, there are numerous ad networks on the market, but some are safer than others. Therefore, advertisers should do some research before picking one.
A simple way to identify the best ad network for your business is by reading the reviews from their existing customers. Apart from that, you also need to check what they are doing to detect and prevent ad fraud.
If they don’t say much about this on their website or portfolio, you should discuss it with their sales team. By doing some market research, you’ll be able to find a safe network.
Ad.txt is a buying method in which the publisher uploads a file for every webpage and links it to the root domain. This file contains information on the Supply-side Platform (SSP) that an advertiser needs to contact to advertise on that particular website.
SSPs play a crucial role in managing programmatic advertising for websites. When marketers and advertisers check this information, there is no way they are going to fall prey to advertising fraud. Hence, this is one step every advertiser and ad network needs to adopt in order to mitigate ad fraud.
Invest in tools to prevent fraud
Numerous tools are available in the market that can help prevent fraud. Advertisers need to do enough research and pick one that best fits their needs. Some are rules-based, and some work on artificial intelligence (AI).
To save your marketing budget from fraudsters, a fraud prevention tool is essential.
Swaarm, for instance, has some excellent features that make it the best way to prevent mobile ad fraud. Its optimization rules can detect fake traffic by checking its authenticity. The software will automatically discard fake traffic, preventing advertisers and ad networks from falling foul of fraud.
Learn more about “10 ways to identify and prevent mobile ad fraud.”
Fraud in mobile in-app advertising
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This year, around 7 billion people will use a smartphone. This means that, by the end of this year, 86 percent of the world’s population will have a smartphone.
Another indication of how popular these devices are can also be found in app stores. Today, there are 2 million apps available on the Apple Store and 3 million on Google Play. As such, it should be clear that people depend on their smartphones for day-to-day activities such as shopping.
Having grasped this long ago, advertisers have subsequently begun investing vast sums in mobile and in-app advertising as it allows them to reach their target audiences. But where there’s a lot of money, there’s often fraud, too, with online criminals targeting advertising budgets through a variety of sophisticated scams.
Using techniques such as app spoofing, ad stacking, retargeting fraud, and bots, they’ve been able to rob advertisers by claiming attribution to fake clicks, app engagements, and clicks.
Types of traffic
Traffic is crucial for mobile advertising, and there are two types: general invalid traffic (GIVT) and sophisticated invalid traffic (SIVT).
GIVT refers to traffic from known crawlers and bots, such as search engine crawlers and self-identified bots. SIVT, however, refers to fraudulent traffic that looks legitimate. Bots that mimic human behavior, malware, adware, and hijacked devices fall under this traffic category.
How does mobile ad fraud affect the industry?
Legitimate businesses might incur heavy losses when they do not take steps to detect and prevent ad fraud. Besides damaging their reputation, they might spend money battling lawsuits and paying TCPA violation fines. They might also incur huge losses, and their sales teams may produce poor results because of misleading leads.
Learn more about “Everything you need to know about fraud in mobile in-app advertising.“
Machine learning and mobile ad fraud
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“Machine intelligence is the last invention humanity will ever need to make.”
Investing in tools that function via machine learning is one of the best ways to combat mobile ad fraud. Many companies use artificial intelligence (AI) and machine learning (ML) to increase efficiency.
For example, Netflix saved literally $1 billion by personalizing content recommendations for their users. According to one report, AI can also prevent 86 percent of security threats and cyber-attacks.
Here are some of the reasons why investing in ML-based ad prevention tools is essential:
It’s proactive and accurate
Machine learning tools use data to identify fraud patterns and irregularities. Their complex algorithms help to self-teach themselves with the help of the data they feed on. After a while, they are able to identify fraud with maximum precision, as they can process vast volumes of data in seconds. Companies using ML-based tools are therefore saving a lot of money being targeted by criminals.
It’s a cost-effective method
Hiring people to do tedious tasks such as identifying fraud may not be the best solution. Humans take a lot of time to process data and can make mistakes too. Conversely, machines can process vast amounts of information in seconds or minutes with almost absolute precision.
Machine learning is also constantly evolving and is therefore one of the best ways for companies to detect and prevent advertising fraud. When you invest in ML tools the financial benefits for your company can be huge, saving money that might be lost to both fraud and human error.
Learn more about “Here’s how machine learning can help prevent ad fraud.”
Why detecting and preventing mobile ad fraud is crucial
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Now that we have learned about mobile ad fraud and how it can impact brands, it is now crucial for you to understand why companies should do their best to both identify and prevent ad fraud.
Here are some of the top reasons why it should be a top priority.
Safeguard your budget
If you want to protect your marketing budget, you need to do everything possible to detect and prevent ad fraud. If you don’t, the likelihood is you will lose money to fraudsters sooner rather than later, diminishing your return on investments (ROIs).
Hence, if you do not have a process in place, you need to work with your team to devise a plan and build a strategy to stop fraud from affecting your business.
Data is everything, and it plays a significant role in decision-making. Advertisers and ad networks base their decisions on the data that’s available to them. If the data gives you the right information, you might invest your budget in the right places.
Ad fraud detection and prevention tools will aid this by filtering the data, removing fake traffic and clicks, etc. You will then be able to trust your data and improve your ROI.
Beat the competition
Lastly, it’s important to understand that companies that invest in ad prevention tools and have the means to battle ad fraud will always be ahead of businesses that don’t – it’s that simple. If you’re not currently spending money safeguarding your business against ad fraud, however, don’t fret. Getting started – and getting ahead of your competition – is always possible.
By investing in ad prevention tools and developing a solid strategy to fight fraud, businesses can save money and protect their capital.
Learn more about “Why it is crucial to prevent mobile ad fraud.“
Mobile ad fraud costs companies billions of dollars. Today, fraudsters use techniques such as click spamming, SDK spoofing, ad stacking, etc., to rob advertisers and ad networks of the marketing budget.
The good news is that there is a lot that companies can do to identify and prevent mobile ad fraud. Investing in machine learning tools will help significantly, as they are fast and accurate in identifying advertising fraud.
Connect with us and learn more about Swaarm’s solution to battle ad fraud. Our team will be happy to guide you so you can gain full control over your traffic.