Mobile has matured dramatically as a marketing channel in recent years, now accounting for over one-third of all digital advertising spend. Mobile advertising fraud is also on the rise. Within mobile marketing’s rapid growth, advertisers, networks, and publishers are all losing audiences and revenues to cybercriminals.
From fake clicks to non-visible ads and those served to bots, literally no ad network is fraud-free. According to a study by Tune, 23 per cent of ad networks have more than 20% fraud, while 34 per cent suffer more than 50% fraud.
Average fraud across all ad networks is more than 15 per cent.
While mobile ad fraud steals billions each year from advertisers, it also has severe consequences for publishers and content creators, undermining trust in the transactions that ultimately fund their work. Ad fraud threatens the entire mobile marketing ecosystem, but who suffers most?
Advertisers Feel It First
Ad fraud can have serious impact on advertisers, inflicting both short- and long-term damage.
In the short term, ad fraud wastes media budgets on faked impressions and clicks that will never translate into sales or revenue. It can also impose operational challenges if an advertiser decides its media plan and choice of publishers needs to be reviewed and changed.
Despite fraud being the underlying cause, advertisers may question the effectiveness of the ad creative they’ve paid for, doubt the strength of the offer being promoted in the ad, or re-consider whether the publisher’s site is really an ineffective vehicle for reaching their target audience.
If those decisions are made on mistaken assumptions or falsified metrics the overall effectiveness of marketing strategies is undermined. A high number of complaints by end users meanwhile can do lasting damage to the advertiser’s brand.
Mobile fraudsters trick advertisers into thinking ads are generating loads of impressions and engagement – while generating zero conversions. The impact on the broader mobile media economy can be profoundly damaging.
Publishers Suffer Too
While we naturally think of ad fraud as an issue mainly for advertisers and ad networks, loss of confidence in a site’s ability to deliver audiences as promised, threatens online publishing’s core business model, too.
Except for a few premium sites with reliable subscription or membership plans, most digital publishers rely on advertising for revenue, offering targeted ‘eyeballs’ in exchange for fees based on impressions, clickthrough’s, sales, or other types of conversions like downloads or app installs.
Fraud degrades advertiser trust in a publisher’s ability to deliver those marketing benefits. They could lose an advertiser’s business completely.
Already facing downward pressure on ad rates thanks to the rapidly expanding inventory on mobile ad networks, fake metrics generated by cybercriminals distort supply and demand, and that affects pricing.
Since fraudsters don’t have to invest their own resources to create quality content or nurture loyal audiences, they can sell their fake ads at lower prices. Publishers find themselves competing with a ghost inventory that doesn’t exist but still drives their ad rates down.
If the internet’s core commodity is end-user attention, counterfeiting that commodity by tricking advertisers into buying fake clicks and impressions squanders advertiser budgets. It also undermines the mobile media economy that publishers and content creators base their businesses on.
Undermining The Mobile Marketing Ecosystem
Ad fraud has an immediate impact on advertisers and ad networks. It also has a lasting effect on publishers, whose business depends on winning and keeping advertiser trust.
For advertisers, the consequences of ad fraud can mean lost media spend and distorted campaign data, weakening their ability to plan, and making their marketing strategies less effective at generating sales. For publishers, the consequences of ad fraud can be long-term damage to reputation and brand equity. Advertisers may lose faith in a publisher’s ability to deliver the audiences and eyeballs they promise.
Advertisers, ad networks, and publishers all need an approach to mobile security that can accurately detect and block even the most sophisticated types of mobile ad fraud, protecting publisher and advertiser business models while safeguarding mobile end users from unwanted transactions.