How the Rise of Mobile Ad Fraud is Affecting Us All

By Dave StaffordSeptember 22, 2015

At this year’s LeadsCon, a key topic of discussion was digital ad fraud. There’s an ever-expanding number of ways unscrupulous affiliate marketers are deceiving consumers and undermining legitimate advertisers, from ad stacking to mobile ad fraud to click-to-call schemes.

According to fraud-detection research firm Forensiq, $1 billion of the $20 billion spent each year on digital advertising is being lost to fraud. That’s a tremendous amount of lost revenue (not to mention customers) that will never be recovered.

So how do we begin to combat such widespread abuse? We first need to start by understanding mobile ad fraud and how it’s impacting brands, advertising and lead generation.

Mobile Ad Fraud is Evolving
Mobile ad fraud isn’t exactly new. It’s been around nearly as long as the smartphone. But, deceitful ad publishers are becoming craftier and are implementing new techniques that are costing brands big money.

Consumers searching on smartphones are moneymakers for many in the business of fraud. This is the perfect scenario for a deceitful ad publisher. Try it for yourself. Search a brand name in banking, insurance or health care. If you look closely at the first few results that populate on your mobile device, the URL associated with the ad is often a combination of the brand name you originally plugged in, along with the addition of a few keywords. This is an imposter ad. 

So, who’s answering the call? It may be a competitor using your brand to generate customers for themselves. Or, it may be a lesser-known brand that may or may not be as reputable. Perhaps more likely, it is an unscrupulous affiliate using the brand name to generate calls for your brand and/or others, raising your acquisition costs and increasing overall marketing spend. Often, the brands being poached are completely unaware this is taking place. Click-to-call imposter ads can have a deep impact on brand reputation, advertising spend and your bottom-line.

Why It Should Matter to You
When other advertisers and affiliates take advantage of, or mislead, the consumer by using your branded or trademarked terms, it can only mean bad things for your brand. With the case of click-to-call misdirection, a consumer is likely to be confused when they reach your company, rather than the one they originally sought out. It impacts your brand reputation to have prospects see your name engaging in these fraudulent practices.

In addition to making your company look bad, mobile ad fraud makes reaching consumers online more difficult, more expensive and less impactful as a whole. If consumers feel manipulated, they’re less likely to engage with legitimate advertisements. This has led to the rise of ad blockers – downloadable browser tools that allow consumers to see no ads at all.

Research by Adobe found ad blocking represents a $22 million loss in advertising revenue this year alone. In a way, fraudulent advertising is killing the very industry it needs to survive.

What You Can Do to Protect Your Leads
Ad fraud is difficult to catch by manually monitoring it on your own. Even though it is outright theft of your ad spend, brand name and good standing with consumers, the rules and regulations are still catching up to these deceptive tactics.

You may think you are preventing deceitful mobile advertising by signing up for one of the programs that scan for specific content or trademarks. One issue with traditional programs is they don’t allow you to trace calls directly back to the offending affiliate.

This leaves the best defense in your hands. Make sure that you research all of your ad partners. Read the fine print on agreements and ensure they agree not to engage in any type of ad fraud. Hold publishers and ad partners accountable and ask to see ad placements on a regular basis. Verification is the key to maintaining control of your message.

Researchers are showing the cost of ad fraud topping $1 billion this year, so I’m sure next year’s LeadsCon will have even more content and conversations about this topic. It’s time to take the fight against fraud to the forefront: brands must protect themselves from this kind of threat and reputation damage. Businesses would never allow a supplier or other partner to grab whatever they want from the cash register, but that is exactly what happens with misdirection and other types of deception. Until this fraud is labeled as the criminal activity it is, it’s up to us to fight for genuine, honest and effective digital ads. 


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