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Major fraud issues with mobile phone advertising: What fraud? The types of fraud prevalent in the mobile ad industry

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

07-12-2020

Mobile advertising continues to capture the lion’s share of digital ad spending in the UK[1]. As explained in the first article of our series, “How is the mobile advertising market structured?”, this, together with the multi-dimensional and cross jurisdictional nature of the mobile advertising market, makes it an attractive target for fraud.

It is important that companies who are looking to attract potential customers to download their applications (“apps”), and to engage with their content through mobile advertising, are aware of the types of fraud which are commonplace. Awareness is the first step to preventing fraud.

The types of fraud prevalent in the mobile advertising market which we are receiving enquiries in respect of, include:

1. Attribution Fraud

Networks and publishers are often only paid if an app is downloaded following users clicking on an advert. If not monitored carefully, this model can invite fraud.

Attribution fraud occurs when networks or publishers fraudulently claim credit for ‘clicks’ through to a particular web page or for downloads of an app that are not actually attributable to an ad they placed. This can be by creating false ‘clicks’ or treating as attributable to them, downloads that are actually completed through organic traffic to an app marketplace.

These frauds can be perpetrated in many different ways, including the way in which ads are placed and appear on our mobile phones; or by networks or publishers falsifying information in algorithms which monitor the source of app downloads. Specific examples include:

Ad Stacking

Ad stacking is where a single mobile advertisement has numerous other advertisements layered behind it. Users will only see the top advertisement but, if this ad is clicked on, clicks will be registered on the multiple ads layered beneath it. The layered ads may all be for the same advertising business, generating multiple clicks when one user actually clicks, or may consist of different ads, generating a spread of clicks for advertisements placed with the networks and publishers when the layered adverts have never been seen by human eyes and the user is not even aware they have clicked on the layered adverts.

Auto-Directs

This fraudulent scheme works by redirecting a website's visitors automatically to an app store or marketplace without visitors clicking on a mobile advertisement. This occurs by a website’s visitors simply entering the website or a specific page within the website. These re-directions are recorded as clicks on advertisements and can take credit for organic app installations.

Visual Deception

This often occurs when advertising content is hidden, or modified, to manipulate users into clicking on it by accident. For instance, where an ad is disguised as part of a web browser, or part of a smart phone key board.

Sham Websites

A network or publisher can report significant numbers of clicks, resulting in installations of apps made via fake websites. The aim is to trick the algorithm monitoring an app’s downloads into registering organic downloads, as if they had been made as a result of clicks from the fake website.

Click Spamming

A common form of attribution fraud, whereby networks or publishers fraudulently generate or report millions of clicks so that when an app is organically downloaded, it will appear that it is attributable to one of the fraudulent clicks.

A high reported click rate, without corresponding app installations, may be indicative of fraud.

2. Manipulation of Data

Networks and publishers can also commit fraud by manipulating the data that it provides to its customers in respect of the clicks and installations made as a consequence of its ads.

This is often used in conjunction with attribution fraud or used as an attempt to cover up attribution fraud.

Vague Sources

This occurs when networks or publishers report downloads from vague websites or application names. For instance, vague sources such as “video” or “stream”. The use of vague sources is indicative of fraudulent activity.

Non-mobile Optimised Websites

Often, when fraud is present, networks and publishers will report clicks from websites which cannot effectively be viewed or navigated on a mobile device. This means that it is unlikely that advertisements intended as pop-ups on mobile phones have generated intentional clicks or installations from these websites.

Significant clicks and installations from non-mobile optimised websites can therefore be indicative of fraud.

Metric Smoothing

Networks and publishers can mis-report where its customer’s ads are being placed and often ads are actually placed on less desirable websites that customers may not wish to be associated with. This can cause significant PR issues for reputable businesses.

Coming Up Next

Our third article “Help: What steps can be taken if my business has been a victim of fraud?” will be published next week.

 


[1] eMarketer, September 2020

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