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    Countering Frauds in Mobile Advertising

    Synopsis

    With mobile advertising rocked by fraudulent app installs, mobile filters may be the ideal solution to detect and prevent fake app installations

    By Ampreet Singh

    With smart-phones taking the global markets by storm, it was merely a question of time before Indian markets too fell prey to their ubiquitous charm. As smart-phones boost Internet penetration at increasingly faster speeds and customers remain glued to mobile screens for hours, marketers have realised this is a perfect medium with a captive audience for their advertisements. The $25-million market of digital mobile advertising in India in 2011 quickly expanded to $80 million in 2015, with many firms spending between 2% and 4% of their overall media ad budget on mobile advertising.

    Given the above scenario, mobile fraudsters soon realised this was a market with immense potential for easy money. Not surprisingly, mobile ad frauds have become a major bugbear on all parts of the digital ecosystem. A recent worldwide study on countering mobile frauds revealed that more than one-third of mobile programmatic traffic runs the risk of fraud. Such rising fraudulent activities hurt the advertising industry's integrity and cause immense financial losses to advertisers.

    With the rise of mobile app economy and smartphone penetration, mobile apps have become a critical area for advertising spends. Unsurprisingly, ad fraud has also penetrated mobile app advertising to a huge degree. Many popular apps routinely report hardly 10% retention of customers within the first week itself. A lot of that is actually due to prevailing ad fraud and misrepresentation of ads. Due to lack of existing technology, many app developers have started using thumbrules (duplicate IPs, CR ratio etc) to understand and reject fraud. Unfortunately, these are again easily hackable and can be managed.

    With frauds rising and no solution in sight, recently some ad money is moving to the CPA (cost per acquisition) model. CPA model costs advertisers more in terms of a higher payout or commissions on each sale. Additionally, the reconciliations and handling of CPA model is more difficult for app developers to manage and maintain. But, due to lack of confidence on CPI model, this model has recently started picking up. But paradoxically instead of resolving the issue related to fraud, the industry is simply creating another more expensive monster.

    A fraudulent mobile app installation is another serious fraud that is estimated to cost the industry around $6.3 billion per annum. With many brands promoting mobile ventures by paying on a cost-per-install system, frauds are rife with many app installs actually done by bots and device emulators that end up reporting app by creating virtual new devices which do not exist. As per industry estimates, between 30% and 50% of all reported paid installs do not happen via real mobile phone users. India is estimated to have the world's second-highest fake app install rate.

    Unfortunately, current solutions in the market for advertising fraud, are designed for the desktop scenario related to fraudulent impressions and clicks detections only. These are carried forward from the desktop advertising world and retrofitted into the mobile app industry. Not surprisingly, they are extremely low in accuracy and easily by passable with off the shelf online available device hacking tools to simulate virtual devices continuously.

    A breakthrough in creating fraud detection technology specifically for mobile devices and apps are mobile filters. Mobile filters provide a deterministic and scientific technology to verify each App Install activity. Advanced proprietary algorithms can be used to uniquely identify bot and emulator signatures. Further, the fraud detection system uses mobile networks to enhance bot detection capability.

    Such filters raise the confidence of app entrepreneurs in their install measures, boosting marketing efficiency. The filters can restore confidence in the CPI model and let marketers know their ad spends are not wasted on fraudulent installs, thereby ensuring maximum return on investments.



    (Ampreet Singh, is CEO & Founder of mXpresso)

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