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Mobile advertising fraud costs the marketing industry billions of dollars worldwide. Victims—small, medium, and large businesses—lose revenue, conversions, and potential customers.
Attackers use malicious methods to attack advertising in browsers and applications: bots, mobile device farms, botnets, emulators and other technologies. This is a serious threat to the entire digital ecosystem.
In this regard, marketers around the world are implementing special tools to combat fraud in order to protect themselves from attacks by cyber fraudsters. This is primarily due to the fact that fraudulent activities have long-term consequences and affect further decision-making by advertisers and marketers. Fake metrics spoil the development of budget allocation strategies and targeting planning for future campaigns.
If you're a responsible marketer running mobile ad campaigns, check out this guide to fraud. It will help you avoid mistakes, save your budget, and save your reputation.
Contents
1. How does mobile advertising work?
2. About fraud: what is it?
3. Fraudulent and Invalid Traffic: What's the Difference?
4. What mobile ad fraud leads to
4.1. Wasting time and effort
4.2. Corrupted statistics
4.3. Loss of reputation
4.4. Decrease in return on investment
4.5. Financial losses
4.6. Missed Opportunities
5. Impact on the advertising and business ecosystem
5.1 Marketing Technology Providers
5.2. Media partners (advertising networks)
5.3. Publishers
6. Signs of mobile advertising fraud
6.1. CTIT
6.2. Sensors and detectors
6.3. Restriction on data transfer
6.4 Conversion rate
7. Scammer profile
8. Technologies and tools of fraudsters
9. Where is the most fraud: iOS vs Android
10. In conclusion
The market is prone to expansion, so businesses are looking for new opportunities to fill vacant or popular niches with their presence. Below are some of the key benefits of mobile advertising:
Mobile advertising can be presented in the format of banners, videos, regular contextual and media ads, push notifications. The choice of format depends on the subject, marketing strategy and goals.
An example of advertising on mobile devices
Below we describe an approximate classic scenario of mobile advertising, the target action of which is installing an application:
Above we described a simplified scenario of how mobile advertising works in the “last-click attribution” model.
Mobile ad fraud is fraudulent activity that involves clicking ads in mobile browsers, inflating in-app video views, faking installs, and other fake interactions. Examples of technologies that fraudsters use to deceive advertisers include:
Attackers are constantly improving their fraudulent methods and tactics. They are challenging the entire industry infrastructure.
Invalid traffic includes any transitions, clicks, views, installations that the user who performed them was not initially interested in. These may be random actions performed by mistake, as well as incorrectly configured geotargeting, incorrect advertising format, etc.
Fraudulent traffic is any transitions made maliciously with the purpose of spending the advertiser's budget or inflating indicators (for example, attribution of mobile app installations) in their favor. This also includes motivated traffic, that is, the one generated by clickers and performers from special cheating exchanges.
This knowledge will allow you to more thoroughly analyze traffic statistics and evaluate the quality of sources for fraud.
Once this data is included in mobile advertising statistics, it becomes virtually impossible to distinguish real users from fake ones.
Instead, advertisers could use these funds to attract real customers, promote in other marketing channels and grow the company. Such damage is considered an opportunity cost that has long-term consequences and represents a greater risk to the business.
However, as cyber fraudsters penetrate this ecosystem, advertising projects become less profitable. Marketing companies that rely heavily on these budgets are facing budget cuts from advertisers.
This has a doubly negative impact on the entire industry, as marketing technology providers often help advertisers better measure the performance of their campaigns, optimize them, and even protect against fraud through basic systems and filters.
Failure to take measures to combat fraud can lead to the loss of the advertising network's reputation and advertisers leaving for other, safer platforms. After all, no one wants to waste money - it should work for the business, and not settle in the pockets of cyber fraudsters.
Domain spoofing fraud is aimed at directly stealing revenue from legitimate publishers. Cybercriminals manipulate traffic by making it appear to be coming from a real and popular source in order to generate fake installs and other targeted interactions. In doing so, the scammers hide fake or low-quality cheap traffic.
Data collected by attribution providers can be analyzed to identify anomalies in user behavior when interacting with an app or ad, device parameters, etc. This provides an idea of what real activity patterns look like.
Since data analysis plays a vital role in identification, using a larger database makes fraud detection efforts more accurate, allowing for faster and more effective detection of fraudsters' schemes.
Data analysis plays an important role in identifying fraudulent activity. To identify fraudulent activity faster, more accurately, and more effectively, it is worth using an extensive database.
These indicators help to form a profile of the device, the user and the installation itself and determine whether there is fraudulent activity in a given case or not.
A simple rule of thumb to remember is that if 100 clicks result in 100 conversions, it is too good to be true. It is likely to be a fraudulent activity. If the conversion rate is too low, it could be a case of click fraud or incentivized traffic.
— The advertiser is a fraud
The role of the user in the digital advertising industry is dynamic. Any participant can act as an advertiser, publisher or intermediary at the same time.
The advertiser can be the fraudster himself for distributing malware. In order to infect as many devices as possible, attackers place advertisements for their application. They may seem harmless on the surface, but after installation, they launch malicious code to perform further fraudulent actions on the user's device in the background.
Important! When installing a mobile application, carefully read the description, if necessary, go to the developer's website. Be sure to install an antivirus on your device.
— Fraudulent broker
An intermediary can be any company that sits between the advertiser and the publisher. There are many ways in which these agencies and specialists manipulate app interactions to their advantage.
One of them is domain spoofing, when the publisher's domain or the app itself is replaced. In this way, fraudsters try to increase their profits. Another method is ad overlay, when one ad is placed on top of another.
— Fraudulent publisher
Publishers themselves can often initiate fraud by using tactics that help increase the value of certain media assets. For example, they can use bots to automate the fraudulent process. Automated programs can do many things: click on ads, install apps, and even interact with the content within it.
— Fraudulent user
The market is dominated by a huge number of free or conditionally free applications. The task of marketing teams is to convince such a user to subscribe to a paid subscription or make a purchase.
However, some users are not ready to pay, but want to get tariff services. For example, disabling advertising.
From bots generating game assets to unlocking swipe limits on a dating app, there are a lot of issues developers can deal with.
Among them:
Fraudsters use click substitution, installation hijacking, fake in-app purchases, and more as tactics to deceive advertisers, publishers, and advertising platforms.
Android, on the other hand, operates more freely and openly. In addition, unlike Apple, Android devices allow users to download applications from other stores. They can be found outside of GooglePlay.
These stores are open to everyone, without any filtering. That is why malicious apps are often uploaded to them. This leads to a high level of mobile ad fraud and other negative consequences.
Mobile ad fraud has no restrictions on placement type, geography, or time of day. The entire digital ecosystem is susceptible to it. That is why advertising platforms, advertisers, and publishers need high-quality solutions to combat fraudulent attacks. A reliable cybersecurity system combined with an adaptive solution to detect and block existing and new fraudulent methods is essential for marketing campaigns and strategies of any scale.
Attackers use malicious methods to attack advertising in browsers and applications: bots, mobile device farms, botnets, emulators and other technologies. This is a serious threat to the entire digital ecosystem.
In this regard, marketers around the world are implementing special tools to combat fraud in order to protect themselves from attacks by cyber fraudsters. This is primarily due to the fact that fraudulent activities have long-term consequences and affect further decision-making by advertisers and marketers. Fake metrics spoil the development of budget allocation strategies and targeting planning for future campaigns.
If you're a responsible marketer running mobile ad campaigns, check out this guide to fraud. It will help you avoid mistakes, save your budget, and save your reputation.
Contents
1. How does mobile advertising work?
2. About fraud: what is it?
3. Fraudulent and Invalid Traffic: What's the Difference?
4. What mobile ad fraud leads to
4.1. Wasting time and effort
4.2. Corrupted statistics
4.3. Loss of reputation
4.4. Decrease in return on investment
4.5. Financial losses
4.6. Missed Opportunities
5. Impact on the advertising and business ecosystem
5.1 Marketing Technology Providers
5.2. Media partners (advertising networks)
5.3. Publishers
6. Signs of mobile advertising fraud
6.1. CTIT
6.2. Sensors and detectors
6.3. Restriction on data transfer
6.4 Conversion rate
7. Scammer profile
8. Technologies and tools of fraudsters
9. Where is the most fraud: iOS vs Android
10. In conclusion
How Mobile Advertising Works
Advertising on mobile devices allows businesses to reach a larger target audience, attract attention to their products or services, and increase sales. In essence, it is part of mobile marketing. This type of advertising is divided into two categories: in browsers (mobile web) and in applications (in-app).The market is prone to expansion, so businesses are looking for new opportunities to fill vacant or popular niches with their presence. Below are some of the key benefits of mobile advertising:
- availability,
- geotargeting,
- understanding the habits of potential customers,
- economic efficiency,
- personalization,
- a multitude of creative possibilities,
- instant result,
- high conversion rate,
- interactivity.
Mobile advertising can be presented in the format of banners, videos, regular contextual and media ads, push notifications. The choice of format depends on the subject, marketing strategy and goals.
An example of advertising on mobile devices
Below we describe an approximate classic scenario of mobile advertising, the target action of which is installing an application:
- The user clicks on an advertisement on their mobile device.
- The advertising platform through which the advertisement was placed registers this click. At the same time, the user is redirected to the page of the advertised application on the marketplace in accordance with the operating system of his device.
- The click is recorded by the attribution provider.
- In the marketplace, the user downloads and installs the application.
- Next, the user performs the first launch.
- The provider's attribution algorithm matches the install data with the click data and records it, determining whether the user is real or not.
- Once an ad interaction matches an app install, the user is marked as inorganic (since they clicked on an ad).
- The install fee will be provided to the relevant media partner and will be displayed in the advertiser's dashboard.
Above we described a simplified scenario of how mobile advertising works in the “last-click attribution” model.
About fraud: what is it
Digital and mobile advertising is at the peak of prosperity. Every year, advertisers invest billions of dollars in it. For example, domestic experts predict that in 2024, Russian advertisers will spend 227.3 billion rubles on mobile advertising. The numbers are simply huge. And where there is such a cash flow, there will be scammers.Mobile ad fraud is fraudulent activity that involves clicking ads in mobile browsers, inflating in-app video views, faking installs, and other fake interactions. Examples of technologies that fraudsters use to deceive advertisers include:
- interception of installations,
- click interception,
- device spoofing,
- mobile device farms and click farms,
- SDK spoofing,
- malware,
- bots and other automated scripts.
Attackers are constantly improving their fraudulent methods and tactics. They are challenging the entire industry infrastructure.
Fraudulent and Invalid Traffic: What's the Difference?
A marketer should understand the difference between fraudulent and invalid traffic:Invalid traffic includes any transitions, clicks, views, installations that the user who performed them was not initially interested in. These may be random actions performed by mistake, as well as incorrectly configured geotargeting, incorrect advertising format, etc.
Fraudulent traffic is any transitions made maliciously with the purpose of spending the advertiser's budget or inflating indicators (for example, attribution of mobile app installations) in their favor. This also includes motivated traffic, that is, the one generated by clickers and performers from special cheating exchanges.
This knowledge will allow you to more thoroughly analyze traffic statistics and evaluate the quality of sources for fraud.
What mobile ad fraud leads to
The consequences of mobile app and browser ad fraud permeate every aspect of an advertiser's marketing strategies and decisions, impacting both the current and future health of the business.Wasting time and effort
Mobile advertising fraud wastes a huge amount of time and human resources analyzing corrupted data and making bad decisions based on it. Marketing professionals spend countless hours reconciling and figuring out where their data is anomaly.Corrupted statistics
Malicious actions and metric manipulation can cause marketers to make poor decisions. Invalid traffic and fake installs encourage advertisers to invest and reinvest in fraudulent media channels that drive the most invalid traffic.Once this data is included in mobile advertising statistics, it becomes virtually impossible to distinguish real users from fake ones.
Loss of reputation
Fraud undermines advertisers' trust in this marketing sales channel. If an advertiser sees that his advertising does not meet certain expectations, does not reach the target audience, then he may begin to reduce expenses on it or stop advertising campaigns altogether.Decreasing return on investment
Fraud directly impacts the return on investment (ROI) for businesses. Fraudulent activity causes advertisers to experience inflated cost per goal and reduced revenue, making it difficult to accurately assess campaign performance.Financial losses
The most obvious consequence of cybercriminals' fraudulent actions is direct financial losses. According to research by foreign experts in the field of cybersecurity and mobile marketing, 15% of all mobile media spending is wasted due to fraud.Instead, advertisers could use these funds to attract real customers, promote in other marketing channels and grow the company. Such damage is considered an opportunity cost that has long-term consequences and represents a greater risk to the business.
Missed Opportunities
With the help of fraudulent traffic, clicks and installations, cyber fraudsters do not allow real potential customers to use the company's product. The company loses the opportunity to establish communication with the target user, which could be converted into profit in the future.Impact on the advertising and business ecosystem
While fraudsters spend advertising budgets, it is not only advertisers who suffer. The damage from fraud is felt by all platforms and participants in the marketing ecosystem.Marketing Technology Providers
Marketing technology providers are making huge profits from digital mobile advertising, allowing them to invest in developing their own technologies and additional services that could increase the effectiveness of advertising.However, as cyber fraudsters penetrate this ecosystem, advertising projects become less profitable. Marketing companies that rely heavily on these budgets are facing budget cuts from advertisers.
This has a doubly negative impact on the entire industry, as marketing technology providers often help advertisers better measure the performance of their campaigns, optimize them, and even protect against fraud through basic systems and filters.
Media partners (advertising networks)
The complexity of ecosystems and the intermediary structures within them allows fraudsters to remain undetected for long periods of time using appropriate technologies and tactics. At the same time, advertising networks may not suspect malicious traffic.Failure to take measures to combat fraud can lead to the loss of the advertising network's reputation and advertisers leaving for other, safer platforms. After all, no one wants to waste money - it should work for the business, and not settle in the pockets of cyber fraudsters.
Publishers
Owners of popular mobile applications and websites rely heavily on revenue generated through traffic monetization.Domain spoofing fraud is aimed at directly stealing revenue from legitimate publishers. Cybercriminals manipulate traffic by making it appear to be coming from a real and popular source in order to generate fake installs and other targeted interactions. In doing so, the scammers hide fake or low-quality cheap traffic.
Signs of Mobile Ad Fraud
Like other digital crimes, mobile ad fraud also has its own signs. They help identify malicious interactions and expose fraudsters.Data collected by attribution providers can be analyzed to identify anomalies in user behavior when interacting with an app or ad, device parameters, etc. This provides an idea of what real activity patterns look like.
Since data analysis plays a vital role in identification, using a larger database makes fraud detection efforts more accurate, allowing for faster and more effective detection of fraudsters' schemes.
Data analysis plays an important role in identifying fraudulent activity. To identify fraudulent activity faster, more accurately, and more effectively, it is worth using an extensive database.
CTIT
CTIT (click to install time) is the time from the click to the installation and first launch of a mobile application. This indicator can be used to understand who makes the click - an automated script or a real user, as well as what technology can be used by cybercriminals: if it is less than 10 seconds, then there is a high probability of using installation interception technology; 24 hours or more - click fraud.Sensors and detectors
Biometric analysis of user behavior is based on hundreds of sensory indicators of the device - from battery level to its tilt angle and much more.These indicators help to form a profile of the device, the user and the installation itself and determine whether there is fraudulent activity in a given case or not.
Data transfer limitation
Users can set restrictions on the transfer of certain data in their device settings. If the user has enabled this function, the advertiser will not be able to find out, for example, the user's device ID. Fraudsters also abuse this function, thus hiding their malicious actions.Conversion rate
Conversion rate shows the conversion of one action into another. For example, converting ad impressions into clicks or clicks into installs.A simple rule of thumb to remember is that if 100 clicks result in 100 conversions, it is too good to be true. It is likely to be a fraudulent activity. If the conversion rate is too low, it could be a case of click fraud or incentivized traffic.
Scammer profile
Fraudsters are not always secretive hacker groups. They can be just amateurs, competitors, ordinary users, publishers and even advertising platforms. Some of them act openly and do not try to hide their actions.— The advertiser is a fraud
The role of the user in the digital advertising industry is dynamic. Any participant can act as an advertiser, publisher or intermediary at the same time.
The advertiser can be the fraudster himself for distributing malware. In order to infect as many devices as possible, attackers place advertisements for their application. They may seem harmless on the surface, but after installation, they launch malicious code to perform further fraudulent actions on the user's device in the background.
Important! When installing a mobile application, carefully read the description, if necessary, go to the developer's website. Be sure to install an antivirus on your device.
— Fraudulent broker
An intermediary can be any company that sits between the advertiser and the publisher. There are many ways in which these agencies and specialists manipulate app interactions to their advantage.
One of them is domain spoofing, when the publisher's domain or the app itself is replaced. In this way, fraudsters try to increase their profits. Another method is ad overlay, when one ad is placed on top of another.
— Fraudulent publisher
Publishers themselves can often initiate fraud by using tactics that help increase the value of certain media assets. For example, they can use bots to automate the fraudulent process. Automated programs can do many things: click on ads, install apps, and even interact with the content within it.
— Fraudulent user
The market is dominated by a huge number of free or conditionally free applications. The task of marketing teams is to convince such a user to subscribe to a paid subscription or make a purchase.
However, some users are not ready to pay, but want to get tariff services. For example, disabling advertising.
From bots generating game assets to unlocking swipe limits on a dating app, there are a lot of issues developers can deal with.
Technologies and tools of scammers
Cybercriminals are inventive. They constantly improve tactics and technologies to develop their fraudulent and malicious activities. They manipulate standard tools and instruments that are also used by marketers and advertisers to use certain functions that help them commit fraud.Among them:
- device emulators,
- proxy and VPN,
- malware,
Fraudsters use click substitution, installation hijacking, fake in-app purchases, and more as tactics to deceive advertisers, publishers, and advertising platforms.
Where is the most fraud: iOS vs Android
According to cybersecurity experts, Android ads are 6 times more likely to be at risk of install fraud than Apple's iOS. Because the App Store is a closed ecosystem, also called a "walled garden," apps undergo rigorous quality checks before being published.Android, on the other hand, operates more freely and openly. In addition, unlike Apple, Android devices allow users to download applications from other stores. They can be found outside of GooglePlay.
These stores are open to everyone, without any filtering. That is why malicious apps are often uploaded to them. This leads to a high level of mobile ad fraud and other negative consequences.
In conclusion
Fraud is a business. The goal of the criminals is to increase their income compared to the funds invested.Mobile ad fraud has no restrictions on placement type, geography, or time of day. The entire digital ecosystem is susceptible to it. That is why advertising platforms, advertisers, and publishers need high-quality solutions to combat fraudulent attacks. A reliable cybersecurity system combined with an adaptive solution to detect and block existing and new fraudulent methods is essential for marketing campaigns and strategies of any scale.
