Watch what you install: Fraudulent ads in apps increase 159% year on year

Fraudsters are taking advantage of new opportunities, as our desire for more apps -- and associated ads -- grows.
Written by Eileen Brown, Contributor

Mobile ad spending -- which was estimated to be $87 billion in 2019 -- will account for more than two-thirds of overall digital ad spend in the US, according to eMarketer.

Last year, for the first time, mobile ad spend surpassed ad spend on TV.

This huge growth was primarily driven by large investments in mobile app ads, which is expected to reach a whopping $201 billion in spend globally over the next three years to 2021. 

But the increase in spend on mobile app advertising means that fraudsters are continuing to take advantage of this trend, with no signs of stopping.

And businesses are losing out. Only 50% of digital ads are never seen, according to New York-based measurement and analytics provider DoubleVerify.

It has recently reviewed the state of mobile ad fraud across the industry.

It found that mobile app Sophisticated InValid Traffic (SIVT) impressions have doubled year on year since 2017. The total number of fraudulent apps has increased by 159% in just one year, from 2017 to 2018.

Over half (57%) of fraudulent mobile apps are categorized as Games or Tools and Utilities.

Furthermore, 1.6-times more new fraudulent ads in apps were identified in 2018 than in 2017.

Screening for fraud across apps is no mean feat. Each app needs to be screened for background ad activity, hidden ads, app misrepresentation (known as spoofing), URL masking that could disguise copyright infringement sites, and measurement (impressions) manipulation.

Apps tend to contain standard mobile display ad slots that are sold in the open marketplace. If a company buys the in-banner impression opportunity, but instead of returning an in-banner ad inserts a video ad player, it could execute a sophisticated scheme designed to maximize revenue for the company. 

These ads could run in parallel from multiple sources, and the user cannot stop the numerous ads from playing in the app; they play in an unstoppable loop, generating revenue for the fraudsters.

Hidden ads are costly to the business. If an ad is viewable, it obviously has a higher value for a brand. But the ad needs to be fully viewed by a human in the correct environment, and in the correct geography for the brand target.

If your intended ad is viewed in an area that will never get to see your product, then the business has wasted its marketing dollars on the campaign.

Roy Rosenfeld, head of DoubleVerify's Fraud Lab said: 

"With ad spend increasingly concentrated in mobile – and particularly mobile app, fraudsters are redoubling their efforts to take advantage. It is critical that brands understand these risks, in order to allocate spend accordingly and install appropriate safeguards for their digital investments."

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