By 2017, some 78 percent of mobile display ad spending will be placed via programmatic media, according to eMarketer, a New York-based consultancy that values the market at $20.45 billion.

Mobile advertising's future, in other words, is clearly a programmatic one. And just as clearly, it is also one that will be marked by fraud. 

Applift, a mobile advertising company based in Berlin and Forensiq, an ad fraud detection company in New York City, put their collective resources together to scope out the magnitude of the problem.

What They Found

Over the course of four weeks, they monitored more than 60 million impressions from Applift's programmatic real time bidding (RTB) platform, DataLift, to study suspected fraudulent traffic. What they found wasn't pretty. 

More than a third of mobile programmatic traffic — 34 percent — is at risk of fraud. Of that, 22 percent was suspect and 12 percent was deemed a high risk of fraud.

Now here's what is really scary, Forensiq CEO David Sendroff told CMSWire: these fraudsters are as tricky, if not trickier, than the hacks perpetrated on the desktop but they have an additional advantage in that mobile programmatic ad buying is less mature than the online ecosystem. That means less awareness on the part of the advertiser and fewer safeguards.

Mobile Device Hijacking & Other Schemes

And how tricky is tricky? Well, there are a lot of examples unfortunately, so Sendroff singles out one that Forensiq uncovered this summer.

  1. Mobile device hijacking, a scheme in which an affected app loads hidden ads unbeknownst to the user (who then wonders why his bandwidth is used up so quickly). The malware then emulates human activity so that it appears legitimate. The advertisers pay the freight; the fraudster collects the proceeds. What this tactic has in common with other fraud in the mobile programmatic ad ecosystem is that it is happening at the impression level. Since pricing is mainly done on a CPM (cost per thousands) basis that is where the fraudsters go. Other ways in which advertisers get ripped off in the mobile ad world, per the Applift-Forensiq study:
  2. Games with viewability. Don't stop me if you heard this because you almost surely have. Like a lot of fraud tactics in the mobile world, it is a variation of what has worked in the desktop environment.  A banner ad is placed where it is almost never seen by users, such as the very bottom of a long page. Here, the study interjects some good news: this particular scheme is very easy to spot because detection technology has improved immensely.
  3. Ad stacking, another carryover from desktop ad formats, is the process by which publishers stack several banner ads on top of each other, while only one of them can effectively be seen. But yes -- all of the banners are bid on and served.
  4. Pixel serving, is literally an invisible ad rendered in pixels not visible to the human eye, The banner ad itself is not displayed but the advertiser gets dinged and the fraudster gets a nice check.
  5. Click stuffing is a tactic in which incentivized ("incent") traffic is presented as non-incent ("natural") because payouts to publishers are usually higher for the latter. Because incent traffic typically has higher click-through rates than natural traffic, fraudsters will also use 'click stuffing,' -- that is creating fake clicks -- to decrease the CTR of incent traffic and make it look like non-incent, the study said. Another trick they use is mixing incent with natural traffic in order to lower install rates and game detection mechanisms.
  6. Redirects are simulated clicks leading to the app store page. What usually happens is a user visiting a website is automatically redirected towards the app store page of an app. "Redirects make for a very disruptive user experience, even though the app install remains the decision of the user," the study noted.
  7. Attribution fraud, another legacy of desktop affiliate fraud, and "cookie stuffing" in particular. On the desktop, a user falls victim to cookie stuffing when he visits a website and receives a third-party cookie from an entirely different website, who is then credited for it. On mobile, the same concept works with the app stores, the study said.  A user visits a website, which then generates a transaction ID for a certain app. "If the user later downloads the target app (e.g. through an app store search), the original affiliate is credited for the install."
  8. Faked postbacks are a technical fraud tactic by which publishers simulate a postback. As the study explains, faked postbacks are not sent by the advertisers' tracking provider but rather by a third party forcing them through the browser, or by using API calls to overload the attribution system of the advertiser.
  9. Rebrokering, a process by which a publisher does not generate the install but "rebrokers" the offer to another publisher, taking a cut in the process. "This makes for a very murky ecosystem, and in the end it’s much harder to know from which kind of publisher the install originated," the study said.
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