Mobile App, Video Ad Fraud Continue to Plague Buyers and Sellers - eMarketer
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Mobile App, Video Ad Fraud Continue to Plague Buyers and Sellers


Shailin Dhar
Founder and Director, Research
Method Media Intelligence

Shailin Dhar, founder and director of research at Method Media Intelligence, is a digital ad fraud veteran who works with advertisers and publishers to help them better protect themselves against this growing issue. Dhar recently spoke with eMarketer’s Lauren Fisher about the rise in video and mobile app ad fraud, and which areas are of particular concern for advertisers.

eMarketer: Where do you see efforts being focused on ad fraud today?

Shailin Dhar: There are three major areas people are concerned about: desktop video, mobile in-app advertising and fake news. Advertisers are more concerned with video and mobile in-app because that’s where they’re spending a lot of money.

While they’re right to be concerned about these areas, what scares me is that people haven’t fully wrapped their head around display and desktop banner fraud. A lot of ad tech companies still don’t understand that there are fraudulent publishers buying traffic and selling display banners.

We’ve been running third-party verification systems, and they’ve gotten better and better in that area, but the problem is still not solved. There’s still a huge loss of ad budgets in desktop and display, but we’re already moving on to try and address in-app and video. It’s hard to understand video fraud if you don’t understand display fraud.

“There’s still a huge loss of ad budgets in desktop and display, but we’re already moving on to try and address in-app and video.”

eMarketer: What are you seeing on the video front?

Dhar: My concern with video is that more and more of it is leading to out-stream video advertising rather than in-stream. In-stream involves a publisher having a video player on their page as well as video content. More and more publishers are moving to out-stream video, which is kind of an interstitial banner that shows a video. Advertisers are still paying for video CPMs, but those video ads are being shown to users who are there to see text content.

Because of that, out-stream video is very susceptible to bots and fraudulent traffic. With out-stream you look at the page, and there is no extra check for them to have video ads vs. normal banners. The same basic WordPress site can have video advertising revenue coming from out-stream ads.

eMarketer: Do you see publishers concerned with video fraud as well?

Dhar: The major publishers are thinking about it because they are the ones that lose out. It’s their brand value and their brand name. If CNN gets spoofed, they’re not getting paid for traffic, but nobody is going to send them an email when they get spoofed. It won’t come up on their radar unless they’re told it’s happening.

eMarketer: What about mobile app fraud? What trends are you seeing there?

Dhar: Install fraud is a big one, but the issue and fear advertisers have is, “Would I have sold this coffee machine to the consumer anyway without having to pay an ad network?” Advertisers are worried that there are ad networks and traffic vendors taking credit for conversions that would have happened organically.

eMarketer: Can you walk me through some of the ways that networks and app developers can falsely claim credit for app installs or conversions?

Dhar: There are a few ways this can happen. The first is incentivized traffic. An ad network may pay somebody with a mobile device 50 cents of gaming credits to download another app. And that ad network makes $1 when that user installs that app. That’s the most basic type of install fraud.

The second is when these installs are falsely attributed to a specific device ID. Every mobile device has its unique device ID that’s designated by its operating system. And they are uniform across the board. So whether that device ID is in mobile exchange one or mobile exchange two, it’s the same ID for the same device.

“Advertisers are worried that there are ad networks and traffic vendors taking credit for conversions that would have happened organically.”

Ad networks have access to these device IDs because they catalog them every time they show an ad or transact on a mobile ad. And what they do is “spray and pray.” In a regular cadence, they start firing off signals back to the ad exchange, saying, “I showed device ID ABC123 an ad for say, the Uber app.” And every 24 hours, the ad network will keep cycling and sending back a signal that they showed an ad and got a click.

eMarketer: What are they hoping for?

Dhar: What they’re hoping for is that at some point, some of those device IDs will actually download one of these apps and their signal of showing an ad and getting a click from that device ID will be the most recent. Because so much attribution is done on a last-click basis, whichever ad network is the most recent one to show an ad and get a click gets credit for the install.

eMarketer: So they’re basically injecting fake activity logs?

Dhar: Right.

eMarketer: OK. And then the third form of fraud?

Dhar: The third type is attribution fraud. And it’s a bit more technical, and it’s more devious. Say there’s a basic utility app that’s free. A person downloads it, and it might have adware on it that allows it to sit in the background of your phone generating ads when you’re not actually seeing them. So it’s on a human device, but the ad is not being viewed by a human. It’s just automatically running in the background.

But these apps aren’t just generating ad revenue; they can also see when that user downloads another app. So if I have a flashlight app on my phone and I go out and download a travel app like Expedia, the flashlight app can see that I just downloaded the travel app.

So what it will do is, it will send a signal that we showed an Expedia ad to this user and got a click. And they are always going to be the most recent one; they’re guaranteed attribution, because they fired that off while the app was downloading. And they get last-click attribution. This is a more devious, sophisticated form of ad fraud because it involves having your actual app on tons of human devices.

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