Mobile marketers accept that “large portions of their ad budgets are exposed and/or lost to fraud” with 69% of marketers citing that at least 20% of their budgets are exposed to fraud on mobile web and 71% for in-app advertising.
So finds a study by Forrester commissioned by AppsFlyer, which sees mobile ad fraud to be the biggest hidden threat to the mobile marketing ecosystem.
With most brands increasingly committed to leveraging mobile to reach consumers and growing their mobile ad budgets, the news is particularly worrying.
Mobile ad fraud is a multifaceted problem, complicated by the murky ecosystem in which marketers are challenged to track data between mobile operating systems, app stores and actors involved in the selling, buying and serving of advertising. As mobile advertising continues to rapidly evolve and become more sophisticated, so too does the fraud being perpetrated. Yet, despite the pervasiveness of fraud in the market, the majority of enterprise marketers still plan on spending more on mobile advertising in the next year.
Nonetheless, the awareness of fraud in the market creates a sense of urgency leading to 92% of advertisers and agencies citing fraud prevention as a critical or high priority over the next 12 months (see below).
Mobile ad fraud is syphoning revenue from the digital ad ecosystem, and is widely touted as a source of great concern because fraudsters are continuously investing in digital tools and technologies that can deliver fake ad impressions, clicks, app installs and engagement. This occurs in a range of methods; from device farms, where large numbers of devices are automatically conducting ad fraud, to malware on users’ devices that simulate legitimate activity. The goal of this fraudulent activity is to appropriate as large a share as possible of marketing leaders’ mobile advertising budgets.
“Our study shows exactly this rising trend: 43% of marketing executives cite that the amount of fraud they are subject to has increased over the past 12 months,” says the report. “In fact, 34% of marketers estimate that over half of their mobile ad budgets are subject to fraud for both in-app and mobile web advertising (see below).
Although mobile ad fraud remains prevalent in every industry, the opportunity for advertisers is too big to miss and thus are willing to invest in mobile despite being aware of the growing fraud problem.
Forrester’s research found that advertising budgets will continue to grow in the next five years and that is exactly why keeping mobile ad fraud under control becomes critical; over the next 12 months, 70% of firms said mobile ad spend budgets will increase by at least 1% to more than 30% compared to last year
Marketers will have to develop an obsessive scrutiny over the allocation and performance of ad dollars in a mobile advertising industry plagued by fraud. However, as mobile ad budgets grow, so too will the willingness of fraudsters to grow and capitalize on the market, which is why it’s mission critical for marketers to combat mobile fraud rigorously and systemically – those that succeed will have a competitive advantage over the rest of the market.
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