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New year, new fraud, new solutions

New year, new fraud, new solutions Mike Rosner

Even though new varieties of ad fraud will certainly emerge in 2016, the exact form they will take is difficult to predict. This is because bad actors and the platforms that they corrupt are constantly evolving.

Cyber criminals can be sophisticated opponents, dexterous, and quick to adapt. With every step forward the advertising industry takes in identifying and diminishing fraud -- for example, ad exchanges chipping away at botnet traffic -- fraudsters look to reduce their footprint, and slip under the radar.

As technology evolves in 2016, new platforms continue to emerge that we may assume are safe, but we must stay vigilant; by making this assumption we may in fact be providing safe harbor.

Mobile ad fraud on the rise

Throughout 2015, a brunt of the advertising community's focus was placed on desktop fraud. Great start -- but we've only scratched the surface.

A recent study by AppLift found that 34 percent of mobile inventory was likely served to non-human audiences. The IAB recently revealed that advertisers lose more than $8 billion a year to digital fraud -- and 28 percent of that fraud happens on mobile platforms. But potentially, mobile ad fraud could be costing advertisers even more than that estimated figure.

Mobile advertising is newer to the ecosystem and was initially assumed to be 100 percent safe -- a notion that was dispelled in 2015. Earlier this year, we found that advertisers were losing upwards of $850 million a year via mobile device hijacking: ad-fraud vehicles approved by major app stores. What makes these "zombie apps" so insidious is that they appear normal to the naked eye and provide utility, while simultaneously running upwards of 16,000 ads in the background over the course of one day. This impacts the consumer as well, draining battery life and devouring data plans.

Now that the alarm has sounded, most anti-fraud vendors are in the process of formulating mobile ad fraud detection techniques. But we are still in the early stages of detection and prevention.

According toeMarketer, mobile ad spending in 2015 was projected to increase by 50 percent, reaching almost $30 billion in the United States alone. And mobile is only going to become a larger portion of the advertising ecosystem. Moving forward, eMarketer estimates that mobile will make up 66.6 percent of the digital ad spend come 2017, rising to $49.81 billion. With the increase of spending in mobile and the demand for more inventory, fraud will increase. As much as digital fraud evolves, one thing remains constant: criminals always follow the money.

The Internet of Things is susceptible to fraud, as well

The Internet of Things (IoT) roughly translates to any device that is able to connect and transmit data through the internet. Even though 87 percent of people haven't heard of the term, there are currently 4.9 billion connected objects and devices, and there will be upwards of 50 billion come 2020. Suffice it to say, the ecosystem is growing rapidly and significantly. While it might be hard to think of home security systems, smart TVs, wearables, and smart refrigerators as being susceptible to digital fraud, they can be prime targets for future cyber criminal exploits.
There has been a renaissance of technology, but that renaissance has also expanded the types of potential abuse. It's now easier to find targets simply because there are so many of them. In addition, there are tools to help; for example, the search engine, Shodan, facilitates the ability to find potentially unlocked connected devices. And if it is a computer, then cyber criminals can run code on it. Ten years ago, no one would have thought that a refrigerator would need to connect to the internet, but today your refrigerator could silently be an accomplice to ad fraud.

And then comes the issue of ad blocking

Of course, advertisers are also experimenting with the IoT. Vizio's Smart TV, for example, connects its owner's home internet networks so that it can then sell the information garnered from the consumer's TV use to advertisers for better targeting.

In turn, the spread of these techniques -- from IoT interference, mobile hijacking, and ad injectors -- will lead to a rise in ad blockers and anti-tracking techniques.
Ad blockers are particularly popular in Europe, where they are anticipated to reach 50 percent proliferation in 2016. This is welcome news to ad blocking firms as they look to build their businesses in the new year.

While ad blocking is certainly within the aegis of consumers' rights, it could also lead to an increase in fraud to fill the gap in inventory demand created by ad blockers. All of these patterns stress the increased need for fraud detection and verification technology.

But it's not all bad

Even though the evolving advertising ecosystem opens us up to new and sophisticated forms of ad fraud, there is no need to lose hope. Discovering new forms of digital fraud is actually a good thing. In this cat and mouse game of eliminating online advertising fraud, awareness is our most valuable currency. Vigilance in detecting ad fraud in all of its shifting forms is the only way to combat, and hopefully eradicate it.

Industry leaders have already begun making headway to regulate the ecosystem in the new year. Not only will this past October's TAG initiative help make fraud more easily identifiable, but the Media Rating Council's 2015 invalid traffic detection and filtration guidelines will also help in the standardization of fraud detection in 2016. Furthermore, the fact that companies certified for sophisticated IVT detection will be reviewed every six months instead of the usual annual review attests to the pace of change in the industry.

We can't see the full picture of what lies ahead in this ever-changing arena, but have faith: With new forms of fraud comes a new, dynamic set of solutions.

Mike Rosner is CRO of Forensiq

On Twitter? Follow iMedia at @iMediaTweet.

Mike currently serves as Chief Revenue Officer of Forensiq and has over 18 years of experience in the advertising technology industry. His track record of success and multi-channel experience includes senior roles at Sizmek (fka Mediamind/Eyeblaster...

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