Fighting for Premium Programmatic Part II: Fraud
According to a new report from Juniper Research, advertisers are expected to lose the equivalent of $51 million a day to ad fraud in 2018. That’s about 9% of all digital advertising spend, and $500 lost by the time you finish reading this blog post. As digital ad spend increases, what can advertisers do to fight back against fraud?
Kiip’s head of programmatic, James O’Connor, and head of data, Jonathan Collins return to discuss how fraud has changed with mobile adoption, what advertisers are doing to combat fraud, and what the industry must do to survive.
1) It’s been ten years since the iPhone came onto the market. How has fraud changed with the widespread adoption of mobile?
James (Head of Programmatic): Fraudsters are using the same old tricks but with an increased level of sophistication. For example, organic downloads are a coveted growth engine for app developers, which are driven by popularity in app stores. In order to drive app store popularity, scammers have developed operations like this one to generate likes and fake ratings which subsequently drive the organic downloads. This is comparatively a less nefarious tactic than attribution fraud or click injection, but both represent a more blatant form of fraud.
I was at an adtech panel where agents from the Department of Justice and FBI were discussing their increasing case work in the cyber security divisions to pursue the criminals operating schemes, which to me indicates how serious an issue fraud has become not just in advertising, but across all business. People are responding to the increased sophistication of these bad actors and are actively creating tools to fight back.
Jonathan (Head of Data): Before talking about what has changed, I wanted to point out one thing that has remained the same. Fraud is, and will always be, about maximizing illicit revenue. For mobile (as with desktop), this means following the money. For example, mobile data tied to location is more prone to fraud because location targeting produces higher CPMs. Similarly, the app install market is susceptible to fraud because of the large amounts of money spent on acquisition, particularly by gaming companies. And, not surprisingly, mobile transaction fraud is rising as mobile payment adoption increases. So tactics have changed for mobile, but the goal of fraudsters to target the most lucrative lines of the business have not.
2) What steps are advertisers taking to combat mobile fraud today?
James (Head of Programmatic): Industry leaders like P&G have raised awareness of fraud and the need for the media supply chain to get cleaned up. Media buyers at companies like Uber are calling out the need for greater responsibility from the tech platforms to not simply be a broker, but a steward of quality, fraud-free marketplaces. Overall, advertisers are leaning in and becoming more informed rather the passing the buck to the agency to let them be the sole subject matter experts. And since brands are the ones holding the purse strings, the rest of the industry is listening.
Jonathan (Head of Data): For mobile data, the good news is that market forces are maturing in a way that is making fraud harder to conceal. Data aggregators and device graph platforms are more rigorously scrutinizing their supply as advertisers are demanding more transparency, stronger validation, and ultimately better performance. This continued pressure on supply partners to ensure their data is properly sourced is the best way in the near term for advertisers to combat mobile fraud.
3) Where do you see the state of mobile fraud in a year? In five years?
James (Head of Programmatic): I think mobile ad fraud will follow the trajectory of the mafia. For too long, bad actors will have gone unchecked but as both industry and law enforcement devise solutions to address the problem, we will see fraudulent activity greatly diminished. I don’t think we’ll see ad fraud entirely wiped out in one, five, or even ten years but the retribution risks for bad actors will increase while their upside will be less appetizing.
Jonathan (Head of Data): In a year, I feel like the variety and effectiveness of mobile fraud tools will increase in many areas to become more on par with desktop. That said, I also feel like there will be a rise in more aggressive fraud tied to transactions as mobile wallet use increases. I may be optimistic, but in five years, I believe that mobile fraud will be a fraction of what it is today as more attention is paid to the vast economic loss it poses. That said, we may be talking about fraudsters spoofing smart refrigerators at that point.
James (Head of Programmatic): I fear the day when my fridge falsely informs me that my milk is still good.
We’ll return for Part III where we dive into moments targeting and the future of premium advertising.Learn more about partnering with Kiip programmatically and how you can achieve 95%+ Video Completion Rates
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