Spotting and Fighting Mobile Ad Fraud to Avoid ROI Loss

Mobile fraud is not a new topic, but it is always top of mind for the ad industry. And with good reason. The big concern with mobile fraud is its increasing sophistication. Fraudsters seem unstoppable in their quest to find loopholes to exploit, create new techniques to use at their advantage. Opportunistic mobile fraud affects the entire supply chain, publishers, advertisers, and everyone in between. The consequences are vast - fraud makes the whole ecosystem less trustworthy, campaigns less effective, and wastes budgets away.

Mobile marketers are at risk of fraud from the moment they launch campaigns. The first step to combat these nefarious activities is to be informed about the different ways defrauders use to affect mobile advertising. The second step is to take preventive measures and fight it. Let's look at how mobile marketers can prevent mobile ad fraud and better protect their apps and paid efforts from scammers.

Mobile fraud is everywhere. Can you see it?

Ad fraud is a global problem but varies from region to region. APAC is said to be particularly plagued with app install fraud - 60% higher than the global rate, and its most affected verticals are finance, shopping, and travel. Gaming seems to be better prepared now to face and prevent ad fraud.

Among the common types of mobile fraud, the most prevalent are the different forms of spoofed engagements and spoofed users. We refer to deceiving techniques as click spamming, click injection, SDK spoofing, ad stacking, app spooking, fake installs and emulated behavior, fake in-app purchases, and all types of bots and fake users. 

What is mobile ad fraud?

Let's consider fraud as the act of trying to steal, divert, and waste advertisers' budget without delivering any real mobile traffic or results. Fraudsters can act at any stage of the process: impression, click, or install. 

Fraud would usually happen with the aid of sophisticated technology capable of simulating traffic or users' behavior, mask post-install data, and "steal" attribution.

How ad fraud affects campaigns and the risk of missed ROI

As an advertiser, it is your campaigns that will bear the brunt of fraud, from inadequate quality attribution, technical difficulties, and skewed results. 

Fraud eats away your budgets, but that is not the only serious repercussion. As a mobile marketer, you incur the risk of basing your decisions on inaccurate data. Flawed results and analysis are among the most significant risks fraud impose because they can cause a vicious cycle of decisions based on wrong assumptions, potentially leading to investing money in ineffective sources and diverting budget from better-planned campaigns.

Let's consider click spamming, for example. By downplaying the number of organic users that an app generates, fraud affects cohort analysis, acquisition, and targeting decisions. 

Fraud on UA campaigns brings down the quality of the user base, affecting the quality of your user segments that will be used for your retargeting efforts. You might be setting up your paid campaigns on tainted grounds - data, sources - and that has severe consequences in both the short and long-term. Worst, by comparison, fraud-free campaigns can appear to be less performing than others with fraudulent conversions. 

Preventing and combating fraud in UA is fundamental to protect your ad spend and maintain your retargeting efforts healthy and reliable. 

In sum, fraud leads to bad decisions that might cost you dearly. It creates a snowball effect that can generate a distorted view of the entire ecosystem.

The fraud issue affects real app users, as well. For example, for gaming, if high-value users realize that there are signs of being cheated by bots, they might become uninterested and stop playing the game. If these "whales" churn, it can have a high impact on an app's financials. 

It pays off to have a clear view of the risks and the estimated impact of ad fraud in all campaigns. Mobile marketers can act accordingly and make better optimization decisions.

How to spot ad fraud

To prevent fraud, mobile marketers need to spot it first. Many fraudulent actions can go unnoticed to the naked eye but can be easily spotted if the mobile marketer looks closely at the data.

In some cases, ad networks would be unaware of fraud staining their traffic. This lack of awareness is a risk to the ad network's reputation and, as a consequence, can lead advertisers to invest their budgets in partners with cleaner traffic.

It pays to be skeptical of your data. As a rule of thumb, mobile marketers should run a manual analysis of their campaign's data once in a while and keep an eye out for outstanding abnormal performance. Too good (or very poor) performance in individual events is, more often than not, a sign of bots and fake clicks. Once you identify those signs and their sources, you can get to the crux of the matter and detect, prevent, and even eliminate fraud completely.

And when it comes to spotting fraud, transparency is mandatory because it assures quality and ethical behavior. Demand transparency from your suppliers and partners and request access to the data and insights related to your campaign.

The first step to do a “fraud check” would be to look at impressions and clicks data for each segment in your campaign. Choose a small user segment and monitor it to spot patterns. When comparing impressions with clicks, if you spot a huge discrepancy that raises the first red flag.

Looking at the retention and conversion rates of your campaigns can also be an indicator of improper activities. Look for signs of an extremely low or very high retention rate. Check if conversion rates show a big disparity between partners. A very low conversion rate might be driven by fraudulent activity in a partner or partners. 

Other metrics to look at are the number of impressions, number of clicks, number of installs, click-through rate (CTR), and in-app events distribution, the number of organic installs, and their distribution by day, revenue per user or lifetime value. Similar to the retention rate, look for unusual behavior. Analyze and compare; look for steep rises or sharp declines on your data graphs. 

If you strongly suspect fraud in one channel or by a certain partner, reaching out to the specific partner for clarification and pausing the campaign are valid options. If fraudulent activity exists, stopping their activity will confirm if the conversions from organic or other channels were being wrongly attributed.

Prevention is the best remedy

The potential for loss due to fraud is too big to be ignored. According to Scalarr's projections, estimated losses can amount to $16.1 billion. Given that we are all bound to face new ways to perform fraud, how can we protect ourselves from these dangers? Knowledge is power, so here are a few measures mobile marketers can take now to fight fraud.

1. Use tight and well-defined KPIs.

Simplify your measurement and keep an eye on your most important KPIs. Knowing what set of metrics to look at keeps you focused. Take note that these metrics can be different from the KPIs set to evaluate campaign performance.

2. Who is fighting fraud in your team?

Assign someone to be responsible for the impact and mitigation of ad fraud in your team. Having one specific team member assigned to the task creates accountability and generates more awareness of fraud signs. Ideally, this person will have a few tech resources and will be the one in charge of looking at the data from a different perspective, investigating outlier results and sources, and, most importantly, explaining and communicating fraud issues to the rest of the team.

3. Get ready with better fraud prevention tools.

Don't try to fight the fraud battles alone. There are new tools and technologies available that focus on avoiding and combating app fraud. Research your options and get one in your arsenal to protect the marketing budgets from being plundered.

Real machine learning can be a great tool in fighting in-app fraud - algorithms can help predict when new issues arise in real-time. Fraud-detection tools run pretty advanced algorithms that detect "high risk" installs with high accuracy.

Look for a fraud prevention solution that works in real-time and takes action to prevent and eliminate fraudulent behavior. It should take actions such as real-time install rejection and real-time sub-publisher blacklisting, either it's an MMP with a robust fraud solution or a 3rd party partner purely focused on fighting fraud.

4. Demand transparency from your suppliers and partners

Talk with your partner about what measures they take to prevent fraud and discerning where to buy and select supply sources. Make sure your suppliers and media partners are ready to fight off fraud with you.

Recap

The time wasted in tackling ad fraud can be better spent on new campaigns and optimization. Finding the right tool and strategies for fraud prevention is a far better option. Clean up your traffic from ad fraud before it affects your entire data set and budget. Do your research and groundwork first. Concentrate on what really matters: your campaign performance.

Are you interested in knowing how we prevent fraud at RevX? Contact us here.

Marta Gaspar

Marta is a digital marketer and a content strategist with 11 years of experience turning ideas into prose and campaigns. She likes to stay updated on the mobile marketing scene and often writes about AdTech.