Mobile ad fraud takes centre stage

Confirmation that the ad fraud problem is getting worse, not better, comes in the form of a recent report published by AppsFlyer, a mobile marketing analytics platform. It found that marketers were exposed to $700m to $800m in mobile app ad fraud losses in the first quarter of the year, a 30% year-over-year increase. Advertisers of shopping apps took a particularly harsh beating, with AppsFlyer estimating that they lost $275m to mobile app ad fraud.

AppsFlyer says that fraudulent app installs now account for 11.5% of all ad-driven installs and 22% of apps now have over 10% fraudulent installs. 30% of these installs are produced by bots, which they say have replaced device farms as the most popular vector for ad fraud.

Whack-a-mole

AppsFlyer’s findings highlight one of the biggest challenges in combating ad fraud: the fraudsters don’t give up when the industry cracks down on a particular fraud method. Instead, they evolve their attacks, forcing the industry to play whack-a-mole.

Will that game ever end? Initiatives like Ads.txt suggest that gains against ad fraud are possible. But Ads.txt is far from perfect and it’s not yet clear how much of a financial impact it will have on actual losses.

There are also actions advertisers can take to minimize their exposure to ad fraud. Some advertisers have significantly cut back on the number of properties they advertise on. JPMorgan Chase, for example, last year reduced the number of sites it advertises on from more than 400,000 to 5,000 without any apparent negative effect. To accomplish this, it first eliminated sites that produced no activity beyond impressions, which reduced the number of sites to 12,000. It then manually reviewed the remaining sites.

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Further reading:

MediaPost: Mobile App Ad Fraud Up 30%  (April 2nd 2018)

Wall Street JournalFraudulent Web Traffic Continues to Plague Advertisers, Other Businesses (March 28th 2018)