Almost a quarter of advertising networks may have fraud levels higher than 20%

Mobile advertising fraud has become a much debated topic as ad blockers are unleashing fear among advertisers, and no marketer can ever be 100% sure that an ad network may be free of fraudulent activity.

According to a study of 24.3 billion clicks across over 700 advertising networks by mobile analytics network TUNE, eight ad networks are 100% fraud, whilst 35 were 50% or more fraud.

Advertising fraud is now a $7.2 billion problem, according to figures from WhiteOps for 2016. Fraud verification firm, Adloox, estimates costs to be even higher, reaching $16.4 billion in 2017.

Despite much outrage and attempts to curb advertising fraud, it appears that the problem is only increasing.

According to TUNE, that’s likely due to ad tech structural issues – which can be addressed using the company’s fraud analysis technology.

Insights by the company show that app install advertising fraud types include click fraud, install and compliance fraud. Additionally, non-app install mobile ad fraud types includes viewability fraud, targeting/compliance, and bot fraud.

The TUNE ad fraud technology found average fraud rates across all ad networks to be 15.17%. Another 23.3% of ad networks also have significant fraud levels at over 20%. Not all of them are pursued by short-sighted marketers. Indeed, some companies mean well, but opt for bad sub-publishers in the process.

It’s not all doom and gloom. Many ad networks have very low percentages of advertising fraud, at fewer than 2% or 5%. Half of the tested ad networks had less than 5% of fraud.

The worst 34 advertising networks look like this for ad fraud:

According to the report, sub-publishing and re-brokering are the main culprits which facilitate ad fraud.

Jim Tommaney, Enterprise Data Evangelist at TUNE explains:

“Often, ad networks re-broker ad traffic to other ad networks or to sub-publishers. One ad network is contractually working with other ad networks. This is generally legitimate as networks provide media buying, but questionable or fraudulent traffic can more easily enter the picture. […] It is crucial to drill down to the sub-publisher level to isolate specific traffic sources for further analysis. This enables marketers to pinpoint where the fraudulent activity is coming from, and work with the ad partner to eliminate it.”

However, avoiding fraudulent publishers isn’t as simple as it sounds as players can simply shift to another ad network. As such, TUNE recommends identifying the bad players to eliminate them.

So how can marketers identify safer ad networks?

The TUNE’s Mobile Advertising Index may be a good starting point, and is already being used by partners such as Sephora, Sony, and eBay, and mobile-first publishers like Supercell, LINE, and Kabam.

In addition, the TUNE fraud analysis reporting tool is always in operation to ensure that advertisers are protected against fraudulent behaviours.

As John Koetsier, Mobile Economist at TUNE points out:

“Fixing fraud is in ad networks’ best interest. Ad networks’ very existence depends on trust from marketers: lose that, and marketers stop investing. When they stop investing, ad networks starve. So the networks have a vested interest in stopping fraud. This is not only a long term existential issue; it’s a daily business success issue. After all, when marketers learn that they’ve been cheated, they often claw back tens or hundreds of thousands of dollars of spend. Ad networks generally have little choice but to refund or replace the fraudulent ad deliveries — and eat the loss.”

A simple strategy for marketers to keep a watchful eye on the networks they choose is to check if they’re seeing a return from their ad spend. As long as there are measurable activities post-campaign demonstrating a positive pattern, marketers may be more secured against ad fraud.

In addition, advertisers are advised to check partner compliance and quality. Peter Hamilton, CEO, TUNE says that if a fraudulent network is spotted:

“First, act quickly. Cut off that source of traffic – this will save you from having to do clawbacks. Second, have a conversation with your ad partner […] review your insertion orders, and have a data-driven conversation based on the data you’re seeing in the TUNE Marketing Console. Remember, you should be backing all of this out to incremental ROI. If you’re not seeing the lift, the value should be obvious.”

Fixing ad fraud isn’t just important for the individual marketer or ad partner, but for the industry as a whole.