The hidden costs of mobile ad fraud

This article was written by TrafficGuard Founder and COO, Luke Taylor for Street Fight.
Some businesses treat the problem of ad fraud as a âtaxâ, considering it to be an unavoidable cost of digital advertising. Fraudsters siphon up to 30% of any given advertiserâs budget using a variety of tactics, such as app-install farms or click spoofing.
While this wasted spend is certainly of consequence, accepting ad fraud as a tax of doing business assumes that your drained budget is the only side effect (an inherently flawed approach). Ad fraud, if left to run rampant, poses additional threats to your performance and business.
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The Ad Fraud Problem is Only Expected to Increase
The forecasts for the cost and volume of mobile ad fraud are growing exponentially. Obviously, as more of our lives move online, which has been dramatically accelerated by Covid-19, there is a growing opportunity for ad fraud perpetrators. And thatâs not going to be the only factor encouraging ad fraud to flourish.
The push toward more privacy-focused browsing environments is likely going to exacerbate the problem of mobile ad fraud. The advertising ecosystem is complex and murky, to paraphrase P&Gâs, Marc Pritchard. The industry has been calling out for greater transparency, which is in direct contrast to the privacy-focused direction in which browsers and operating systems are moving. While good for consumer privacy, measures such as eliminating third-party cookies and other identifiers like IDFA reduce transparency in the already complicated ecosystem and make it easier for fraud to masquerade as real human traffic. In mobile app advertising, the function of attribution is going to be significantly impacted by Apple retiring its IDFA in iOS 14 â which is good news for fraudsters and bad news for marketers. Fraudsters will be looking forward to taking advantage of this new shroud of cover, which will see some of their most rudimentary click spam tactics being rewarded by misattribution.
Itâs not all doom and gloom, however. We are entering a period that is going to be rife for innovation as marketers and marketing technology companies find new alternatives to the cookie and mobile IDFA.
Learn more: Reactive ad fraud solutions are putting your ad spend at risk
Solving Mobile Ad Fraud âTaxâ and Other Consequences
So now that you know the ways ad fraud is impacting your business, how do you solve it? Just like with any other cybersecurity effort, youâll need a tool that can protect your assets. In order to truly stop ad frauds effects, you should be looking for a solution with two fundamental components:
- Prevention: When fraud is stopped, you donât waste media spend, it doesnât pollute your data, optimisation is significantly more effective, and you can safely and confidently scale your ad spend without having to go through time-consuming manual volume reconciliations
- Transparency of traffic quality: Fraud prevention shouldnât be in a blackbox. You need to be able to see clear and defendable reasons for each invalidation as a demonstration of reliability and effectiveness. You should have access to reporting that shows you how fraud prevention is helping your business overall. That is the difference between adtech that feels like a tax and adtech that is actually delivering value
By protecting your ad spend to fight against the incorrectly perceived âtaxâ, youâre not only improving the integrity of your performance data but also doing your part to strengthen the digital ad ecosystem as a whole. As more businesses adopt proactive fraud prevention, the flow of advertising funds to fraud perpetrators will slow down â cutting off fraudsters at the source and making it harder for fraud to occur in the first place. Transparency in the ecosystem and protection of individual assets will be the answer to eliminating fraud.
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