Mobile ad fraud, which has been a concern since the early 2010s, continues to be a challenge for brands and agencies in Asia Pacific.
Why has nothing changed?
“Countries like India and Indonesia are experiencing massive growth in their digital economies, but this results in marketers being distracted with scaling quickly because it presents tempting business possibilities,” Ronen Mense, the president and managing director for APAC at AppsFlyer explains.
“On the media side, we can see that, because the demand for growth is so robust, some networks do not want to lose business over their inability to drive growth, which leads to lessened control and increased risk of fraud.
“Marketers in the region still rely on local ad networks to drive demand. These networks, however, often suffer from high rates of fraud. According to our data, nearly 60% have a fraud rate that exceeds 20%,” he says.
Resources can also often be stretched. As a result, he says many are forced to buy from media sources with a lower price point, where fraud is more prevalent, thereby exposing themselves to heightened risk.
He also observes that businesses in the region are typically sensitive to price, forcing networks and media sources to offer high volumes of ad space at cheap rates. This is more likely to be utilized than those with higher prices despite the associated risks of fraud.
Which industry is the most vulnerable to mobile ad fraud?
The study, produced by AppsFlyer, found that the finance industry was the hardest hit by mobile in-app fraud, followed by shopping and travel. More than half of all non-organic installs of finance apps were fraudulent in APAC, with shopping and travel rates averaged at around 35%.
Laura Quigley, the managing director for South East Asia at Integral Ad Science (IAS), adds that fraud does not discern because it is a lucrative business and that means aside from finance and shopping, it will also try and gain dollars from the other major apps categories messaging services, social media, utility apps and gaming.
“We will never operate in a world with no fraud. What is possible is for marketers and publishers to work together to reduce fraud,” she explains.
“Publishers and platforms, much like marketers, can invest in verification tools that will allow them to target away from fraud and ensure reducing fraud on advertisers buys, ultimately protecting the advertiser and allowing them to feel confident to continue to invest in digital.”
Types of fraud
Quigley notes that there are several in-app types of fraud, some similar to that of desktop, location fraud, malicious apps, app name spoofing, domain spoofing, hidden ads and app install fraud. Much like on desktop, she says these malicious types of activity take place without the consumer realizing it.
She points out that in-app fraud is not isolated to APAC and is a global issue facing the industry. For South East Asia, which is one of the fastest growing emerging smartphone markets compared to the rest of APAC, eMarketer predicts that mobile ad spend will account for nearly 70% of ad expenditure by 2021.
Quigley says this means more advertisers are investing, which will drive fraudsters to get some of the shares, with very little input and risks they can make a windfall.
“Fraud is going to happen wherever they can get a payout. If it is clicks, they will find a way to click more, if it is downloads and installs, they will also find a way to falsify or increase the number of installs,” she says.
“Verification can help to reduce in-app fraud which is more important as this will ensure marketer dollars are maximized and not wasted, but app installs fraud solutions are still in the infancy stages.”
She adds: “Mobile will continue to take over other mediums and with that, fraud will continue to be an industry challenge as it is today. It’s important to note that it is a fixable issue, there are ways for the marketers and publishers to reduce their risk.”
How should bots and install hijacking be handled?
As bots are a type of fraud that does not even require real devices and are most often server based, everyday fraudsters make smarter bots to attempt to bypass protection.
“Install hijacking involves faking a click in order to claim attribution. The most basic way is using malware to detect when an app has been downloaded, then faking the click before the first launch. This results in what we call short click to install times,” Mense explains
“How do you solve this? Prevention systems employed by apps need to possess and analyze lots of data, while also learning via machine learning mechanisms.”
Joshua Kwah, the marketing director at Taiger, an artificial intelligence company, adds that automating the detection process through anti-app fraud detection partners is a viable next step. That means enlisting bots to fight bots and identifying smart bots.
He explains that bots can be trained to understand hard to replicate human behavior like pressure and duration of tap or swipe and use it as a basis for abnormality detection because bots today typically use machine learning to learn, detect and repeat.
However, he points out that when new abnormalities arrive, human intervention is needed to adjust the algorithm.
“Deep learning-based bots which mimic a human’s decision-making process, can self-learn without the need for intervention (think Jarvis from Iron Man) and without huge sample data sets,” he says.
“What this means for businesses is less supervision resource and the solution would be more scalable for other functions where fraud detection is still critical but sample abnormal data scare.”
It is imperative that marketers continue to invest in a solution that allows them to target away from fraud and help create a cleaner quality ecosystem so that mobile can continue to be a smart and safe place to invest.
The original article ‘Rage against the bots: how should marketers keep increasing mobile ad fraud at bay in Asia Pacific?’ first appeared on The Drum.
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