In-App Advertising Fraud: The Biggest Threats to Advertisers

In-App Advertising Fraud: The Biggest Threats to Advertisers

smaato logoIn 2018, mobile ad spending accounted for nearly 70 percent of all digital advertising and surpassed TV as the leading advertising medium in the U.S. Not surprisingly, as brands allocate more of their ad budgets to mobile, the channel has also attracted fraudsters looking to game the system and turn a quick buck.

Fraud in the mobile ecosystem is top of mind for advertisers, but few in the industry want to discuss the topic in the detail it warrants. However, it is only through frank and transparent discussions about fraud that our industry can move forward in successfully combating the problem.

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Know Your Fraud

In the battle against fraud, you must know your enemy. These are the most common forms of mobile ad fraud affecting advertisers today:

  • Ad stacking: Multiple ads are “stacked” on top of each other, with only the top ad being visible. The problem is that all ads are being paid for, regardless of whether the ads are visible or not.
  • App spoofing: With app spoofing, an advertiser is buying premium inventory but receiving placements on low-quality apps. This happens when an app sends a fake bundled ID to advertisers to misrepresent itself as a premium app. Ads then appear on a different app than the buyer had intended, potentially threatening brand safety.
  • Background traffic: Malicious code generates traffic when the app is in the background or the smartphone is not even being used. This inactive application “shows” ads that will not be seen by users.
  • Bots: Ranging from simple to sophisticated, bots can be used for a variety of malicious activities, such as generating fake traffic, clicks and installs.
  • Click fraud: Malicious bots, or “click farms,” can generate money from advertisers who pay more for ad spaces with high click-through rates or pay on a per-click basis. Another form of click fraud is click injection, in which over-permissioned Android apps trigger a click before the installation of a new app is complete. The fraudster then receives the costs related to the install and steals the money directly from the advertiser.
  • Retargeting fraud: Bots imitate the behavior of interested customers in order to attract higher retargeting eCPMs across apps participating in the fraud.

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Regarding Invalid Traffic

In any discussion of ad fraud, the term “invalid traffic” is sure to arise. Advertisers need high-quality traffic to make their campaigns a success. Fraudsters know this, so most forms of fraud involve turning invalid traffic into something that looks legitimate. However, not all invalid traffic is necessarily fraud. Advertisers should keep in mind these distinctions when talking to their partners.

  • General Invalid Traffic (GIVT): GIVT includes traffic generated by known crawlers and bots. This traffic does not attempt to mimic human behavior and is not considered fraudulent. Filtering out this traffic is possible through lists of known data centers and crawlers.
  • Sophisticated Invalid Traffic (SIVT): SIVT is fraudulent traffic that seeks to appear as legitimate. This traffic avoids simple patterns that can be easily identified and can present a serious threat to traffic quality. Since the fraudsters are actively trying to mask this traffic as legitimate, identifying and filtering it requires advanced analytics and human intervention.

The industry is making strong collective progress against fraud through initiatives like app-ads.txt, which increases transparency and improves buyer trust in the inventory offered to them by their SSP partners. But all parties must remain vigilant. Identifying and stamping out fraud in apps requires the right combination of in-house technology, expert staff, and trusted partners. To even get started on this path, advertisers need to have an understanding of what they’re facing. With the above-shared knowledge in place, advertisers pave the way for more productive conversations that will lead to a smoother path to transparency and exceptional mobile results.

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