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Mobile Ad Fraud Predictions by FraudScore

Fraud detection systems became more powerful and easy to use nowadays than they were before. But at the same time fraudsters became more inventive. Believe it or not, but advertisers all over the world lost more $6.5 billion by actions of scammers in 2017. And this situation will get even worse this year. FraudScore team prepared their forecast for the main ad fraud trends of 2018.

The changes in Web Industry in 2018

The domain spoofing and fake programmatic inventory are still the most prevalent kinds of ad fraud today. In 2017 International Bureau of Advertisers (IAB) created ads.txt, an industry-wide defense against domain spoofing, which helps to protect publishers and their advertising partners from corrupted inventory.
The programmatic giants like Google are already filtering using ads.txt. Even though fraudsters have developed several workarounds for ads.txt, domain spoofing will nearly disappear once publishers will adopt it across the industry.

Click – spamming

Another trend that came from 2017 is click spamming. The main problem with click spamming is that it captures organic traffic and then attributes clicks to users who actually didn’t make them. The fraudsters can operate with clicks 24/7 on the background without any visible ads. They could even send impressions-as-clicks to make it look as if a view has converted into an engagement. They just imitate user’s activity and mark the organic traffic as some CPA traffic which came from mobile ads. But in reality, it’s a fraudulent activity and all you do is just losing money. The advertisers pay for users who were actually organic without knowing that they were. But another drawback is this situation can negatively affect the whole marketing strategy. Because of the interrelated metrics, advertisers can’t see the real picture and instead of generating organics such as ASO, branding and press outreach, developing their social profiles, they start investing money in mobile ads. And at the first glance, it seems reasonable that all these ads bring tons of users to their platform. But it’s a lie that fraudsters cover. The entire app’s attribution efforts would be seriously polluted if click spamming wasn`t spotted at the early stage.

Click Injection

Continuing the click -spamming topic we should mention the click injection, the new and more sophisticated form of click-spamming. The fraudsters detect when the user downloaded other apps on an Android device and trigger clicks right before the new install completes, so they can receive the credit for organic installs as a consequence. This situation definitely confuse advertisers and again, as in the case of click spamming they have some certain expectations about paid marketing, they waste money into ineffective advertising channels instead of paying attention to other ways of promotion.
Both click spamming and injection are the types of fraud difficult for advertisers to detect by themselves. If you have such problems fraud-detection systems can become a rescue.

WAP clickers and subscriptions are back

In 2017 almost all the industry experts paid their attention to the WAP subscriptions. Trojan-SMS.AndroidOS.Podec is poisoning advertisers’ and users’ lives from 2015 but last year the activities of WAP clickers increased a lot. They work on a well-established scheme. Trojans get the list of links from their control center and then invisibly interact with links and pages using special JS-file. It is common for fraudsters to steal money from advertisers by clicking and browsing pages but that’s not the only thing they do. WAP subscription can steal money from end users suggesting them to pay for the service (or apps) that they don’t really need. Not only advertisers but end users are also suffering from this type of fraud, so keep your eyes opened.

Bots are running the world

The major focus of advertisers everywhere is now on bots. The advertisers start to count money and be more responsible. In 2018 they want more transparency from their vendors about traffic sources, retargeting, and pricing, as well as implementing proper tracking practices and setting the right expectations for their results. It has a positive impact on the quality of programmatic inventory and traffic. But in the meantime, bots get better and better at imitating human behavior. In 2018 advertisers, publishers, and cybersecurity professionals will need to work together to understand main threats and find new ways to protect from cyber criminals and the bots they build.

“The main trend in 2017 and it’ll continue in 2018 is that almost all mobile ad fraud market and services participants realized the huge amount of Attribution fraud (click-spamming, click-injection) and they finally began to fight it. Since 2016 the development of botnets doesn’t slow down the pace, malicious applications (Adware) are increasing their functionality” – says FraudScore CPO Roman Safonov.

According to the 3rd annual Bot Baseline Report the economic losses due to bot fraud in 2017 were 10% less then they were in 2016, despite the fact the advertising spending is expected to increase by 10 percent or more. But it’s too early to celebrate the victory. The more money coming from online ads – the more fraud will follow.

Transparency and Accountability

The hot topics in 2017 were mobile video, programmatic and ad fraud. This attention is expected to grow in 2018. Advertisers are planning to spend on mobile video ad 49% more than in the past year (it’s nearly $18 billion). Mobile fraud will increase as well because of the tendency of people to watch more video on phones and tablets and this number will increase by 25%+ in addition to the already existing quantity. By 2019, nearly 80% of programmatic ad spend will go to mobile ads rather than desktop, while advertisers are slated to lose $19 billion to fraudulent activities — equivalent to $51 million per day.

To sum up

One of the main problems is still there: fraud is good for all stakeholders in the ecosystem except the one who is paying money. A fraudulent ecosystem which benefits everyone in the supply chain is difficult to fight against. In 2018 and later, advertisers and agencies will continue investing in the knowledge and tools to fight mobile ad fraud. This will give them a competitive advantage.
The FraudScore team is also investing a lot in the R&D, adding new features and fraud detection techniques. More ad prevention and detection solutions are coming this year.

Victoria Petrova is a freelance writer and social media expert who writes about everything from fashion to business. Previously, Victoria wrote many articles for one of the most popular fraud-detection systems, FraudScore.

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