The threat and impact of ad fraud in the Mobile Industry 👾📱

The mobile industry is growing at a pace never seen before. As new online channels spread fast into the whole world, the access to smartphones and high-velocity mobile internet for most of the population generates a perfect scenario for mobile advertisers to invest more in advertisement and grow their apps. When we analyze the statistics of every Q, we see that most of the apps are scaling in terms of revenue from users and also having their investments being placed in user acquisition, improvement of apps, new technologies, and efforts to retain those users. The industry is spending billions of dollars every year and when any industry moves that much money, there will be fraudsters trying to get a piece of that cake.

The impact of mobile ad fraud is contested, several sources measure it in different ways, but the numbers are a bit shocking.

According to TrafficGuard, the total cost of ad fraud: $34 billion, will reach $87 billion by 2022. The WFA predicts that ad fraud will become one of the biggest markets for organized crime by 2025, worth more than $50 billion. Interceptd says that 21.3% of iOS app and 26.9% of Android app installs are fraudulent.

Source: TrafficGuard

While we can debate on the accuracy of these numbers and predictions, one thing is for sure, fraudsters are already getting their cut from the mobile advertisement budget.

But what is ad fraud?

Ad Fraud is an activity to defraud advertisers, publishers, or supply partners, by exploiting their technology. The main objective of it is to steal a bit of the advertiser budget, and as we’ve seen before, it’s not little. Fraudsters use different types of fraud to achieve their objective, creating fake impressions, fake clicks, even fake installs. They are constantly trying to evolve their strategies in order not to be detected and blocked by the MMPs, Fraud Prevention Softwares, Advertisers and Media Sources. It’s a game of cat and mouse.

The impact of fraudsters on the industry do not affect only the budget of Advertisers, but also their decision-making process, how they allocate their budget across different sources, their audience target and much more. With the data compromised, the apps can make big decisions based on dirty data that is not real data from the users, which can jeopardize their future growth.

The marketing team of app companies have this huge responsibility of knowing the market, how media sources work, partner up with reliable fraud prevention tools or partners that have one, and also and more importantly, enhance their knowledge on this matter. Getting to know how frauds are done and how fraudsters act is a big step in making sure you are investing your budget correctly and being protected from fraud tactics.

Rocket Lab is a company committed to fighting ad fraud and in the next blog posts, we will explain to you the most known tactics used by fraudsters so you can learn about it and be always one step ahead. We’ll also share tips and best practices so you can protect yourself from any type of fraudulent activity. For us the only way to stop fraud is knowledge, let’s share it.

Stay tuned for the next posts!