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3 Predictions About Ad Fraud In 2017

By on December 23, 2016

Originally written for CMO.com.

For many of us who monitor digital ad fraud, 2016 marked a sea change in the way brands and agencies think about the money they spend to reach consumers inside mobile apps.

After years of ignoring the in-app environment and malicious practices such as device hijacking, major industry players not only acknowledged the in-app threat of fraud, but addressed it with technology solutions and buying strategies aimed at cutting bad actors off at the pass. In this sense, 2016 was a successful year in the fight against ad fraud.

But the larger struggle is far from over.

Indeed, the industry’s response to in-app fraud is merely one in a never-ending series of battles that break out every time brands begin investing in a new category of digital advertising. First, black hats develop a new strategy for corrupting the emerging pool of inventory. Then the good guys create new tools to stop them. And on and on it goes.

In 2017, it’s only natural that this cycle will expand to new fronts based on how and where advertisers are spending their money these days. With this in mind, here are three ad fraud predictions to look out for in the new year:

Fake News Will Require Constant Vigilance From Advertisers
Though traditional media outlets have been more concerned with the threat of fake news to democratic discourse, this recent epidemic also poses major problems for advertisers.

For one thing, appearing beside a fraudulent conspiracy theory associates a brand with content that is inaccurate and untrustworthy. For another, the sensationalist articles have higher bounce rates caused by the content and poor browsing experience, meaning that brands get low in-view rates and short periods of consumer attention.

Unfortunately, blacklisting tools will have only a limited impact on this front in 2017. Since publishers can create new sites whenever they want, advertisers will need a more real-time approach to ensure that they’re not buying inventory from publishers that peddle falsehoods and/or hate speech.

Attribution Fraud Could Run Wild In 2017
In 2016, black hats started ramping up their attacks on brands that purchase mobile ads on a cost-per-install basis since these advertisers are less likely than CPM buyers to work with a third-party fraud detection partner. In many instances, this has meant committing attribution fraud, a tactic by which a bad actor makes it look as if it was responsible for an organic download by faking a click to the advertiser’s tracking platform.

Over the next year, we should expect to see attribution fraud running rampant over the digital ecosystem—at least until brands and agencies get serious about squashing it.

Bots Are Going To Look More Human Than Ever
The increased flow of brand dollars to digital environments over the past few years has caused advertisers to place greater emphasis on attention metrics like viewability, time-in-view, and engagement rate. As a result, fraudsters have worked diligently to create bots that spoof these key performance indicators to make it look as if they are real human beings. For example, bots have started to simulate mouse movement and viewability.

In order to confront this threat in 2017, advertisers must carefully choose the right KPIs and look closely at whether the publishers on their media plans are really helping them achieve these goals. For instance, if you can distinguish sophisticated bots from humans, you will be able to expose scenarios where a site with high viewability (for example, 80%) actually has low viewability (such as 20%) when you strip away the bots.

More than anything else, brands hoping to stamp out fraud in 2017 must get to work building systems that allow them to catch irregularities immediately and before it’s too late. While many advertisers rely on a quarterly review to spot bad actors, today’s fraudsters are so fast that these processes are simply insufficient for keeping up.

Instead, advertisers must be persistent in pressing their vendors and affiliate networks for transparency into how their budgets are really being spent. While fraudsters are always searching for new ways to exploit our marketplace, brands that combine this approach with patience and hard work can severely limit the damage they incur.