Mobile ad fraud: In-app less vulnerable, but vigilance needed

Mobile advertising comes in two forms: in-app and mobile web. In-app advertising is the bigger of the two, as users in APAC spend most of their screen time in-app rather than browsing mobile web — more than 85% of the time spent using phones is in-app, according to eMarketer.

The good news is that while in-app advertising is newer than mobile web, the more recent format is proving to be safer. This is especially encouraging as in-app advertising continues to grow as an important channel for advertisers.

A joint study by Smaato and Protected Media found that in-app advertising had 25% fewer fraudulent attempts than mobile web as a share of total traffic. These attempts were detected and prevented before they could cause harm. The study looked at 40 billion impressions among 10 DSPs and mobile exchanges.

While the potential payoff for in-app advertising may be greater due to the size of the market, fraudsters find it easier to exploit mobile web. That's partly because the fraud tactics used on mobile web are similar to those used on desktop, so it's easier for these fraudsters to exploit both platforms.

What Fraud Looks Like

Among the various types of ad fraud, tactics include:

• Bots/Viruses: These simulate human users on a large scale to earn money from advertisers. This type of fraud occurs 74% less often in-app compared to mobile web.
• Tunnelled Traffic: This technique hides the real geolocation of the user to make it easier to commit fraud. Tunnelled traffic occurs 32% less often in-app compared to mobile web.
• View Fraud: Ads are intentionally shown in a way that's invisible to real users. This can be done by stacking multiple ads on top of each other, with only the top ad being visible. This happens 85% less often in-app.
• Reputation Fraud: Publisher and user IDs can identify if someone was previously suspected of committing fraud. This occurs 83% less often in-app.

While it's good news for app publishers that in-app advertising is safer than mobile web, it's still not enough in the ongoing fight against fraud. With in-app advertising being so lucrative, fraudsters regularly develop and deploy new methods to cheat the mobile advertising ecosystem.

One of the more recent large-scale cases of in-app ad fraud happened earlier this year. In this instance, both legitimate advertisers and publishers were affected. Buzzfeed reported that an ad tech company was running hidden video ads behind the banner ads displayed in reputable apps. Advertisers essentially paid for ads that were invisible, while publishers had to worry about their users' slow performance and increased battery drain. This particular case of fraud was stopped once it was publicly revealed, but other cases of fraud often fly under the radar. 

A key problem in deterring ad fraud is that the chance of facing criminal charges is low. When the FBI charged a group of ad fraudsters last year, industry observers were surprised (but pleased) that criminals finally faced punishment for their actions.  

There is no easy or quick solution to ending fraud. In our experience, it takes a combination of proprietary technology, an in-house staff of anti-fraud experts, and partnerships with leading tech providers. None of this is simple or inexpensive, but it's the best way to eliminate threats before they become a problem.

Fortunately, there are also several industry-wide initiatives that are already paying off. One is the Certified Against Fraud seal issued by the Trustworthy Accountability Group (TAG). This certification is given to companies committed to eliminating fraud by following strict industry-leading requirements.

A more recent development that shows lots of promise is the release of app-ads.txt. This initiative developed by the Interactive Advertising Bureau (IAB) helps cut down on counterfeit inventory being sold programmatically. The web-based version, ads.txt, has proven very effective, and the app version released in March is already making a big difference.

As an industry, it's important to come up with solutions that can scale across the entire supply chain. TAG certifications and app-ads.txt are good measures, but it's important for everyone to take greater strides towards creating a protected mobile marketplace.

Alex Khan is APAC managing director at mobile and app monetisation platform, Smaato