Mobile ad fraud and what SMEs can do about it

Mobile ad fraud and what SMEs can do about it

The internet has made a giant leap towards a mobile-first future. Businesses -- particularly Asia-based SMEs -- would find that the handheld screen is now the most important window through which to reach consumers. According to a recent article by Asean Business, Thailand comes first with the largest amount of time spent on the mobile internet, boasting an average of 4.2 hours per day, more than anywhere else in the world.

It would seem then that the perfect opportunity for startups and budding tech entrepreneurs in the country is simple: to reach more customers by investing further in mobile advertising. This is partially true; mobile advertising today is an essential part of any marketer's arsenal, particularly for businesses looking for efficient ways to scale their customer base.

However, as the market for mobile advertising has grown, so has the number of fraudsters. Today, they have evolved beyond click farms and simple download bots, to introduce far more sophisticated methods of manipulating ad spend.

Smaller businesses are hit harder than other businesses, as ad fraud constitutes wastage of already-tight advertising budgets, while also corrupting the data they receive from ad campaigns, disallowing them to better understand users and achieve the results they seek.

We have to understand the problem of fraud. To be able to combat the problem, it's important for businesses first to understand how mobile ad fraud is carried out. It typically takes one of these forms:

View fraud: Multiple, different display ads are inserted into a single ad placement (a technique known as ad stacking). Advertisers are charged for multiple ad impressions when in reality only one ad is being displayed to users.

Click fraud: Automated scripts or bots that simulate real users are used, usually on a large scale. Often hidden inside a legitimate looking app, bots make it possible to manipulate traffic to apps or even trick apps into thinking activity is taking place.

Installation/activation fraud: Automation is the name of the game in many industries now, and even fraudsters have kept up with the times. Instead of click farms, software is now utilised to create fake installations of apps in an effort to increase their store ranking. Other methods use malicious software or exploits to modify device information or crack the app's SDK in order to send virtual information, such as simulating an app download, back to the network or app store.

In-app fraud: In-app fraud falsely facilitates metrics such as cost per action. For example, fraudulent ads may be served to users with incentives such as in-game currency or items, to get them to return to games they have stopped playing. When users click on a fraudulent ad, they still receive the currency or items they want, but are not charged for the purchase. This means that when the publisher or advertiser looks at the campaign data, the monetisation is exaggerated (as the cost of the items has not been deducted from the increase in revenues caused by the ads), and thus the fee to the ad network is also exaggerated.

Needless to say, mobile ad fraud is a serious issue for businesses in general. To ensure that their advertising spend is not wasted on empty clicks and metrics, businesses will have to take steps to avoid fraud.

Fraudsters have upped their game with technology, and likewise technology is the way to fight back. Employing established mobile advertising vendors with integrated anti-fraud solutions can give businesses more confidence that their advertising spend is utilised efficiently.

As with any marketing campaign, it is important to track results on mobile advertising closely. Watch out for signs of mobile ad fraud by monitoring user behaviour that does not seem to make sense. For example, if you recently ran a successful app install campaign, but did not experience any increase in user activity after, the installs may have been fraudulent.

It is important to deactivate poor sources of traffic quickly once you detect mobile ad fraud. If you work with a mobile advertising vendor, report the fraud immediately so they may help you stem the traffic and put a stop to wasted advertising spend.

In our increasingly mobile-first age, creative, well-targeted ad campaigns cannot be underestimated. In a recent market intelligence report by MAGNA2, mobile spend in Apac will represent 80% of total budgets by 2022, with growth being driven by search, social and video.

Ad fraud is unlikely to go away anytime soon. Nevertheless, businesses should embrace the challenge and find ways to navigate around it. It takes the collective effort and vigilance of everyone in the industry to influence change in the issue of ad fraud. Only then can the problem be eliminated for good.

Vivi Wang is Mobvista's business development director for Southeast Asia and Taiwan.

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