The emergence of Mobile Ad Fraud in Southeast Asia and India

The phrase "cybercrime" is not new, but most people would associate it with credit card theft, email scams, or data loss. However, there is another fraud that is even more prevalent today - Mobile Ad Fraud.

Mobile ad fraud is a type of ad fraud plaguing mobile based performance campaigns. It is an attempt to exploit mobile advertising technology by defrauding advertisers, publishers or supply partners. The objective of the fraudsters is to burn marketing and advertising budgets.

Being able to fight mobile ad fraud demands an understanding of the types of techniques fraudsters use day in and day out. Find below some of the most common types of mobile ad fraud techniques, how they work and what threats they pose.

Types Of Mobile Ad Fraud

Mobile ad fraud is a constantly changing field, and fraudsters are getting creative with their approach to mimic real consumer behaviours. The same fraudsters that generated nonhuman impressions last year using malware are also capable of misrepresenting desktop impressions as premium CTV this year by using deceptive methods.

BOT Fraud -

Bots are basically the non-human traffic coming your way and imitating the real traffic. This can be defined as the artificial inflation of clicks and impressions on any website which may affect the revenue of the publisher. It includes unintended clicks or non-human traffic.

IVT Fraud -

Also referred to as Nonhuman Traffic (NHT), IVT is online traffic generated from machines or other bot activity that interacts with digital ads. This traffic does not fulfil any ad serving quality in terms of ad clicks and impressions. In most cases, clicks and impressions not made with genuine interest are considered invalid traffic. In the world of mobile advertising, IVT disguised as human behaviour is a huge issue.

Types of Invalid Traffic (IVT):

There are two types of IVT which are:

1. General Invalid Traffic (GIVT): It stays in the background and is a negligibly risky type of IVT. The bots coming from non-threatening places generate this type of IVT. However, these are least risky, but they have their own functions. These help in measuring, iterating and improving the ecosystem. Moreover, GIVT does not have any engagement with ads on a website.

2. Sophisticated Invalid Traffic (SIVT): This is the kind of invalid traffic which actually is ‘invalid’. SIVT is the traffic which is generated to click or view ads, in turn, enhancing the revenue. Along with it, fraudsters use SIVT in order to manipulate location data, to hijack devices, to spoof domains and much more.

Fraudsters usually work well on patterns so that their activities don’t get detected easily. Thus, curbing SIVT is essential for reaching your desired revenue.

Fraudulent Instals -

Fraudulent installs are often driven by incentivised campaigns. Users are lured to install apps and in order are offered some form of points, coupons, cash backs and discounts. These installs are often classified as incent installs.

Adware/Malware -

Mobile malware are malicious software that impact the mobile operating system. They are intentionally designed to track user’s data and their digital footprint. As more and more users are moving towards mobile operating systems, cyber criminals are changing tactics and designing more prominent malware for financial gains.

Mobile Ad Fraud Levels in Southeast Asia and India

Mobile ad fraud has evolved from simple actions like claiming impressions into more sophisticated activities that are even more harmful and very well concealed. Although the issue of mobile ad fraud is not new, the expertise of today's "white collar" fraudsters makes them a continuing threat to the digital advertising industry.

Southeast Asia has more than 360 million internet users, making it a lucrative target for fraudsters. With a growing digital population and smartphone users in the region, brands are spending exponentially in digital, giving more reasons for fraudsters to be active. With 90% of Southeast Asia's 360 million internet users primarily connecting to the internet through their mobile devices, it’s no wonder that the in-app environment is a key target for the fraudsters.

Indonesia and Vietnam, are the two fastest growing digital economies in Southeast Asia also show the second and third highest rates of SIVT, indicating that fraudsters are following the money and momentum.

Nonetheless, it’s a common trend that mobile ad fraud prevails globally, not just in Southeast Asia and India region, and it’s going to just disappear. Fraudsters are getting smarter and faster. There are no tools to remove it completely, and it is having a huge impact in both campaign performance and ad spends. Despite understanding all these, combatting mobile ad fraud is often seen as optional rather than necessary arms race.

Industry barriers in technology adoption across Southeast Asia and India

As digital ad spend grows at a rapid pace in the Southeast Asian and Indian market, the incentives for fraudsters to innovate and find new fraud methods are growing too. Due to its size, growth, and comparatively low investments in technology, the combined region, Southeast Asia is a prime target for fraudsters.

This underlines a far greater need for digital marketers to deploy mobile ad fraud detection and prevention measurements. Various factors contributing to this are:

• Low awareness in the industry: There is a general lack of awareness around sophisticated mobile ad fraud within the wider digital marketing industry, and mobile ad fraud is largely understood only at more senior levels on the brand and enterprise side.

• Technical challenges: Mobile ad fraud is still considered to be a technical area of expertise across our industry. Only about half of the industry really has an appreciation and understanding of mobile ad fraud in their roles. This means that it is a topic where expertise is reserved to those in more technical roles, ad-tech platforms or senior positions at enterprises. Brand managers, media planners and client-facing staff at social platforms may not be as familiar with or have a deeper awareness of the complexities of fraud and the corresponding tools and technologies available to combat each of these fraud types.

• Misplaced success and cost metrics: Increase in ad spends on digital channels has resulted in a rise in ‘bad actors’ that lure marketers into buying fraudulent inventory. When compared to legitimate sources of inventory, these ads typically perform well, with high click-through rates (CTRs) and view-ability. These misunderstood success metrics drive marketers to focus on quantity (reach and engagement) more than quality - meaning they often end up overlooking the threat of mobile ad fraud.

What’s Next?

Digital space is one where fraud gets rewarded easily as there is a lower barrier to entry and a chance of getting caught.

Southeast Asia and India face unique challenges in mobile ad fraud, and it is clear that mobile in-app fraud is one of the key areas they need to look into. This is a constant battle with the market’s growth rate far exceeding the ability to keep up with new fraud mechanics in the space, and technical challenges and limitations in the region. Additionally, a focus on click-related KPIs and low media costs further increase the potential for fraudsters.

Beyond understanding the potential threat that mobile ad fraud has as well as the limitations we have, the industry also needs to understand that there are many ways to combat mobile ad fraud and it takes the entire ecosystem to do so.