Mobile Ad Fraud Costing Advertisers $1B Annually

mobile-ad-fraudMobile app advertising in the United States has evolved into a huge business worth an estimated $20 billion annually. As the business expands, mobile ad fraud is becoming more prevalent, costing advertisers upwards of $1 billion each year. Fraud-detection firm Forensiq has released a new report showing that as much as $1 billion of advertising money is being lost to various methods of fraud.

Mobile app fraud can appear in several manifestations, including device emulation, mobile user-agent and location spoofing, and fraudulent user-acquisition methods. However, Forensiq reports in its research that a new manifestation has been uncovered, which it calls “mobile device hijacking.” In these cases, malicious apps hijack mobile phones and turn them into an ad-viewing botnet.

For its research, Forensiq tracked more than 5,000 apps exhibiting suspicious behavior, such as rapid ad loading and background functions. The firm discovered that some of the apps being tracked downloaded a script allowing the simulation of ad clicks and the loading of the advertiser’s landing page without the user’s permission. Some of the other apps redirected users to websites and other apps in the iOS and Android app stores through affiliate links.

The malicious mobile apps were able to mimic human behavior by loading new pages and cycling through app functions, allowing the continuous loading of advertising. The researchers found that these apps were loading far more ads than any normal application would, with some loading as many as 20 ads per minute. They also found that in many cases the ads were loaded in the background when the app wasn’t being used, so the user never saw the ads or knew they were loading on the device.

The report states, “These apps run constantly, even when not actively in use, serving thousands of invisible ads every day on a single device. To the consumer, this means potentially petabytes of bandwidth wasted daily; in just an hour, a typical malicious app installed on a single device can download 2GB of data per day, consisting of images and videos that are never seen.” Forensiq said its research showed that more than 13 percent of total mobile app inventory was at risk.