The impact of fraud on mobile marketing

Mobile marketing is an increasingly attractive and profitable channel, especially with segmented and geolocalized ads. But this has also caused an increase in mobile fraud that affects marketing companies and departments in particular.

How does fraud affect mobile marketing?

Fraud in mobile marketing affects both marketing departments and users in different ways. On the one hand, marketing departments suffer major financial losses from investing in fraudulent mobile marketing proposals. Also, the data and analysis that they obtain from these fraudulent activities are fake, which invalidates many hours of work. The company’s online reputation is also damaged when fraud causes ads to appear on questionable websites or those associated with illegal activities, such as pirating websites.

For users, these fraudulent ads mean a security risk, since they often contain viruses or other harmful programs. One of the main goals of pirating programs is to steal personal and/or banking information, a problem that affects millions of users every year. Another common issue with fraudulent apps is data consumption: some apps continue showing ads even though the user doesn’t see them, which is an unnecessary expense for the company, and it uses up the user’s data.

Fake traffic in numbers

There are many statistics about the serious problem of fraud in mobile marketing, especially for companies. One of the most significant is that 34% of mobile traffic may be fake. Given that one of the main goals of marketing is attracting quality traffic to a website or landing page, fake traffic seriously affects the implemented strategy since it translates to financial losses and invalid analysis results, as it does not address the zero conversion of this type of traffic.

Another significant statistic is financial losses. It must be kept in mind that in the United States alone companies have lost 4.6 billion dollars to fake traffic in 2015.

5 main types of fraud in mobile advertising

Mobile marketing strategies are increasingly sophisticated, and along with them, fraud and scams are also becoming more sophisticated and complex. Even so, there are some that are very popular, perhaps due to their effectiveness or ease of implementation.

Geofraud
Data that falsifies device location. The company buys geolocalized traffic, and in exchange, the ads are shown anywhere, which reduces conversion.

Fake Impressions
Fake impressions of the ads are generated, for example, showing three or four overlapping ads in the same space. The user only sees one, but all the companies are charged for the impression. There are different techniques to create fake impressions. For example, if an ad is not visible according to IAB standards it is fraud, even if it is well-intentioned. One type of malicious fraud occurs when, for example, false impressions are generated by hacking the server’s API.

Fake Clicks
Through fake profiles or bots, fake clicks are created that provide invalid traffic to the webpage or e-commerce. It it known as “non-human traffic.” Some social networks such as Facebook are fighting this problem by closing millions of fake profiles and expelling bots.

App Download Fraud
The user installs an app that then doesn’t exist (ghost app), but the download is charged to the company all the same. Or, an app is installed that constantly downloads ads even though it doesn’t show them, charging the company and eating up user data.

Credit Card Fraud
Purchases are made with fake bank information to simulate profiles of high buying power consumers.The good news is that, as fraud advances on the mobile front, increasingly effective solutions also arise to verify customer data and identify and prevent this kind of fraud.

Recommendations

Look for simple patterns in your traffic or KPI
One highly effective way to detect fake traffic is to monitor the traffic and KPI of the campaign for suspicious patterns. Unexpected app download ratios, strangely uniform time between click and installation for all users from a single source, or too little time between click and installation are patterns that should make us suspect.

Combine technology and people in data analysis
Another good strategy is to be proactive: combine technology with a specialist or team to detect these patterns or other suspicious indicators in time. Do not wait for the final results of the campaign to analyze the data.

Share good practices against fraud
If you are a marketing agency, you think that no one wants to provide fake traffic. Share information and practices that worked for you in your sector to prevent this kind of fraud (discretely if necessary).

Fraud of the Future

The new kinds of fraud take advantage of interconnectivity. The Internet of Things connects different devices, which means that security issues and fraud for companies and consumers extend to wearables, TV, integrated hardware, etc.