By Imran Masood, VP country manager, AUNZ, DoubleVerify
It’s a universal truth that fraudsters follow the money.
Within adtech, evidence of ad fraud arose soon after the first pay per click was introduced in the late 90s and continued to accelerate. So much so, that Wired Magazine was predicting that click fraud could swallow the internet by 2006.
Since then, we’ve made considerable strides to counteract bad actors. However, it can often feel like ‘whack-a-mole’. One constant in the last two decades is that fraudsters evolve their schemes to adapt to new platforms, consumer trends and technologies. The speed and volume of advertising offers bad actors unprecedented opportunities, which is why it’s important for brands and their agencies to ensure they have the most up to date fraud protection solutions in place.
Here’s some of the latest fraud schemes we’ve uncovered during 2024.
Retail Media
According to IAB Australia’s Retail Media State of the Nation 2024 Report retail media advertising is on the rise in Australia. The report found that over the last 18 months, 37% of retail media investors spent a significant amount of their media and marketing budget in retail media, up from 26% in 2023.
Every time a new advertising platform takes off, we see a spike in fraud schemes. For example, last year we discovered the first two industrial scale ad frauds targeting audio (BeatSting and FM Scam). Fraudsters consistently gravitate towards emerging channels and retail media is no exception.
Whilst malicious fraud on a retailer’s owned properties is currently lower than more mature channels, fraud is beginning to emerge. Scraper bots, for example, are often used by third parties to pull pricing, inventory, and other product details from the page, leading to wasted ad spend when reported as a real impression.
Over the last two years we’ve been protecting retail media clients from a group of schemes known as “Scorpio”, a term coined from the automated scraping scripts’ activity. Our fraud lab identified this sophisticated botnet operation, which has caused significant Invalid Traffic (IVT) spikes and can also cause site lag, similar to a deliberate DDOS attack.
Notably, these often occur on large retail sites during shopping holidays – something for marketers to consider as they plan this year’s upcoming campaigns.
Whilst you were sleeping; the new audio threat
Podcasts and audio content continue to grow in popularity, with this year’s IAB Australia Internet Advertising Revenue Report (IARR) revealing digital audio advertising is up 23 per cent year on year reaching $290.2m. This means, the fraudsters have more money to chase and audio ad fraud schemes are getting more prevalent and sophisticated.
Indeed, this year we discovered a scheme that quite literally makes money whilst you sleep with popular white noise apps being used for fraudulent audio streaming to divert advertising dollars.
For example, apps like “Deep Sleep” and “Deep Sleep Kids” are developed by the same company and have amassed over 10,000 downloads. On the surface, these apps seem safe and legitimate and hold five-star ratings, but it was discovered they’re actually generating fake streaming data by selling audio impressions where ads were never actually played.
Fraudsters are becoming increasingly sophisticated, using tactics such as spoofing residential IP addresses and mimicking audio apps. They set up counterfeit servers to fabricate audio ad requests, creating the illusion of active users and inventory desirable to advertisers. These fraudulent requests are then sent to supply-side platforms (SSPs), ad exchanges and ad networks. When an advertiser wins a bid for this inventory, their ad spend goes to waste on a non-existent opportunity.
This fraudulent activity not only wastes advertisers’ money but also diverts funds away from legitimate audio channels and publishers.
Fake App Reviews
In 2023, the DV Fraud Lab’s investigations into mobile app fraud doubled, and we expect continued growth. This is because Generative AI tools like ChatGPT have revolutionised content creation for both marketers and fraudsters and has vastly accelerated the speed and scale that both good and bad actors can enter the market.
We’ve witnessed a huge uptick in generative AI crafting fake app reviews across all types of apps, from mobile to streaming services. Designed to artificially inflate an app’s credibility, users who install them are often bombarded with an overwhelming number of out-of-context ads, similar to Made-for-Advertising (MFA) websites created solely to display advertisements.
However, beyond being simply irritating, fake app reviews can have a broader impact on the digital advertising ecosystem. For example, even after users uninstall the problematic apps, they can still display traffic using falsification schemes, sometimes hijacking devices and runningads incessantly, even when devices appear to be off.
For advertisers, this can make placing ads within highly rated apps more tricky to navigate, necessitating more stringent criteria and vigilance to avoid fraudulent environments. Not to mention that our research indicates that bot-based app fraud costs unprotected advertisers millions of dollars annually.
So where to next?
Bad actors will continue to find ever more ingenious ways to waste your advertising dollars. This means wasted budget, wasted time and wasted carbon expenditure, given every ad impression comes at a carbon cost. So unless marketers want to continue playing whack-a-mole, verification technology should now be considered table stakes protection to identify and block the next new threat to their ad spend.
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Top image: Imran Masood