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Major fraud issues with mobile advertising: How to avoid being the next victim of mobile advertising fraud

  • United Kingdom
  • Financial services disputes and investigations
  • Fraud and financial crime

17-12-2020

Earlier this week we explained what steps can be taken if your business has been a victim of fraud. However, businesses which want to avoid having to take such steps should make sure they have preventative measures in place to ensure they are not the next victim of mobile advertising fraud.

The steps which can be taken by your organisation to avoid advertising fraud include:

1. Due Diligence

Thoroughly research the mobile advertising market, and the entities that will be involved with your specific advertising, before entering into an agreement with a mobile advertising agency.

Ensure you are clear which companies will be marketing your products/services/apps for you, especially if, as is market standard, the mobile advertising agency you are contracting with intends to sub-contract to multiple networks and publishers. In what jurisdiction are they based? What does their online presence tell you about them? For how long have they been in business? Who are their key stakeholders? For who else do they perform similar services? Is there any evidence of the mobile advertising agency, publishers or networks having been subject to material complaints or disputes previously?

2. Contract

The agreement between your organisation and any mobile advertising agency should be expressly recorded in a written contract. Before the contract is signed, independent legal advice should be sought on the obligations of both parties under the contract, and the protections it offers your business.

Publishers and networks to which the mobile advertising agency wishes to sub contract ought to be named in the contract or a schedule. If mobile advertising agencies are unwilling to divulge this information, that might be a warning sign. Consider whether contractual arrangements should be put in place with any other third parties other than the agency.

In the alternative, you might seek for the contractual terms to be clear that the mobile advertising agency is liable for the actions of any publishers and networks to whom it sub-contracts. This would provide some protection in respect of other parties being based in jurisdictions where enforcement might prove difficult, or challenges associated with issuing proceedings against persons unknown.

Any contract entered into should be very clear on which laws and which court’s jurisdiction will apply should there be a dispute between the parties.

In addition, make sure it is clear where you want your business to be marketed. It is advisable that the types of websites that you want your app to be marketed on are expressly recorded or potentially set out the types of websites with which you would not want to be associated.

Consider the terms of the contract, and whether a break clause is included, to allow your organisation to terminate early if it is not receiving a clear benefit from the services being provided or other issues are identified.

It is critical to assess, and include in the contract, exactly what benefit your business needs to receive for payment or commissions to be earnt by the agency, publishers or networks. Will this be on a per click basis; downloads of apps; users interacting with the app once downloaded; or something else? The more measurable, the better, and clearly more favourable terms are those that give a demonstrable benefit to your business before payments are triggered.

3. Reporting Data

Make sure that, as part of your agreement with any mobile advertising agency, you are provided with transparency reports each month which include a breakdown of:

a) where your ads are being placed;

b) how many clicks your ads are receiving; and

c) how many downloads your apps are receiving as a result of clicks generated through the ads.

This is key information, with networks and publishers often only being paid if an app is downloaded following users clicking on an ad that it has placed.

You should compare and contrast this data with internal data in respect of organic downloads. Has there been a noticeable uptick in downloads since the ads for your app were placed? Is any of the data provided indicative of data manipulation? Vary your ad budget, and use of mobile ads, over time and monitor what impact this has on your results. Consider using two unconnected agencies to benchmark and identify any data that appears to be inconsistent.

Use key performance indicators to judge the mobile advertising agency’s success. Continue to assess on an ongoing basis whether your organisation is receiving a clear benefit from ads being placed.

4. Third Party Monitoring

Third party mobile analytics and performance marketing platforms can be utilised to collect information about mobile advertising impressions, including views and clicks on mobile ads. These often track clicks on ads and then match them to installations of an app.

By utilising third party mobile analytics, your organisation will be able to identify which app downloads were attributable to publishers, networks or mobile advertising agencies.

Through the analysis of this data, your organisation will be able to analyse whether any trends are indicative of attribution fraud.

Be aware that third party mobile analytics and performance marketing platforms often rely on networks, publishers and mobile advertising agencies providing accurate information in respect of identifying clicks that resulted in installations. Wherever possible, seek to instruct third party mobile analytics and performance marketing platforms, which produce and analyse independent data.

Most data analytics firms (for an increased fee) offer fraud detection systems which can warn you of data suggesting potential fraud. This will typically also give you access to your own historic data, allowing trends to be monitored and providing evidence of fraud, meaning there is a greater chance of your business being able to take action, should it become a victim of fraud.

Conclusion

This series of articles has addressed the key questions raised in enquires made of us in respect of mobile advertising fraud. We hope that you have come away with a greater understanding of:

1. how the mobile advertising market is structured;

2. the types of fraud prevalent in the market,

3. the steps which can be taken if your organisation has been a victim of mobile advertising fraud; and

4. what measures can be implemented to avoid your organisation being the next victim.

Should you have any comments on, or questions arising from, this series we would like to hear from you.

 

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