Marketers must be more aware of the risks of ad fraud on mobile ad campaigns

Ad fraud is currently a huge challenge for marketers. It cost the industry £1.89bn globally in the first half of this year alone, and the World Federation of Advertisers forecasts that by 2025 £38bn will have been spent in fraudulent activity each year.

In addition, as online ad spend grows, the risk marketers will lose budget to fraud increases. Last year, £1.34bn worth of ad spend was spent online in the UK and almost two-thirds of UK ad spend is predicted to be online by 2020.

Despite this, marketers are divided on whether ad fraud is a threat to their mobile advertising campaigns. Findings from our recent research into ad fraud show marketers are unaware of the impact. In fact, 41% do not consider mobile ad fraud to be a risk to their ad spend at all.

However, the threat of ad fraud is very real. This means it’s more important than ever for marketers to truly understand the effectiveness of their campaigns to be able to protect their ad spend from potential interference.

The cost of ad fraud

As devices, channels and platforms proliferate, user consumption patterns evolve but the threats from bad actors remain ever-present. Fraudsters are constantly adapting with new technology.

As a result, fraud is becoming more advanced and fast turning into a multi-billion-pound industry with recent reports claiming it could top £30bn globally. As bots can mimic real user behaviour with smartphones and mobile devices, many marketers agree that the complexity of newer ad formats creates new opportunity for a peak in crime – from our research nearly 70% share this concern.

Because engagement appears genuine, it is hard for marketers to identify which activity is real and fake. This is particularly concerning because on top of the financial impact to brands, there is also a huge risk to reputation if engagement is based on fake activity.

Understanding the risks

Worryingly, many marketers who are aware of the risks do not heed the dangers. Our study shows that while mobile ads top the list for where marketers will put future investment, they are also identified as the channel with the greatest fraud risk.

Another prominent concern for the industry is the manipulation of important and sensitive data, as fraud contaminates genuine data and insights that businesses rely on to make decisions.

Our recent 2019 State of Mobile Fraud report uncovered the true scale and sophistication of attacks by fraudsters. We identified that, on top of the huge loss of ad spend to fraud, 22.6% of non-organic app installs globally can be classed as fraudulent. We work with brands to provide 360-degree protection to help them detect and block fraudulent activity. Machine learning powers our tool to block known and unknown fraud at every level of the conversion flow, pre, during, and post-install.

With more than one in five non-organic installs classed as fraudulent, a lack of trust puts the entire business model at risk. The longer the threat lingers, the greater the strain on the resources and relationships between brands and their marketing partners.

Ad fraud protection

The speed at which fraudsters adapt is accelerating, from one to two months in 2018 to as little as two to three days today. Therefore, marketers’ livelihoods in the age of fraud require a comprehensive approach to security. From an awareness of the different threat practices to the implementation of cutting-edge technologies to analyse user behaviour, businesses can identify emerging patterns to flag suspicious activity to block attacks.

Being able to support teams so marketers can leverage data sets and tools with machine learning and artificial intelligence to identify threats will give them the power to fight back against fraudsters. By implementing multi-layer security, advertisers can put in place measures to spot and combat the growing threat from the fraudulent activity quicker. Hiring a dedicated anti-fraud team is also a crucial precaution many businesses are taking to overcome the threat – over a third of the marketers we surveyed have already taken this step.

Marketers must not ignore the warnings and learn to exercise greater caution around highly susceptible markets, platforms and verticals. The threat of ad fraud is huge but by demanding full transparency from media partners, marketers will have a clearer view of what activity is and isn’t fraudulent. Armed with knowledge about the performance of their campaigns and the true impact of fraud on their spend, they will be able to prevent future threats.

Based in London, Paul Wright currently heads up the UK, France and Middle East operations for AppsFlyer, the leading attribution and marketing analytics platform. He’s a seasoned professional with over 20 years’ experience in digital marketing, building and shaping strategies across the world’s largest brands, agencies and technologies.