How Fraudsters Make Money: Everything you Need to Know About Ad Fraud

In this article, we’ll go through how fraudsters make money and information on how fraudsters attempt to steal your ad money and how to avoid it. According to a recent analysis from Juniper Research, marketers would lose $19 billion to fraudulent activities next year, equal to $51 million every day. This amount, which represents internet and mobile advertising, is expected to climb to $44 billion by 2022. As a result, marketers need to comprehend the danger. 

What is Technical Ad Fraud?

The misuse of advertising technologies for unjust profit is known as technical ad fraud. Fraudsters are seeking to steal from digital ad marketing budgets worldwide using tactics like click spam, install farms, and SDK spoofing. Although there are several methods for committing ad fraud, the fundamental premise is to mislead attribution models for financial advantage. 

Why is Fraud Prevention So Important?

Effective fraud protection technology is more necessary than ever, with so many various forms of ad fraud to battle. Aside from your ad budget being wasted on fraud, he entire cost of ad fraud is far more than the amount of money taken from your advertising budget. Compromise data, for example, can destroy your analytics and lead to a wrong marketing approach or wrong product decisions. Also, simply detecting fraud after it happens causes some workload on the marketing team, as they need to optimise more frequently and discuss the billable numbers with the ad networks at the end of each month. That is why using a fraud prevention tool rather than fraud detection saves you more than just your ad budget.

How do Fraudsters Make Money?

Understanding how cyber thieves make money is crucial to protecting your marketing money. To combat ad fraud, you’ll need proper fraud detection and prevention measures in place, but it’s also vital to understand the various strategies that fraudsters might employ. The following are some of the most typical methods that fraudsters use to steal a company’s marketing money.

1.Click Spamming

In click spam, also known as click flooding or click fraud, fake clicks are generated from real user devices, without the user’s intention to claim credit for an organic install. This allows the fraudsters to make it look as though a person clicked on an ad and installed an app as a result. When a user visits a fraudulent website or app, the fraudster might do background ad clicks that are not apparent to the user, or apparent to the user without the user’s initiation. Clicks can be created at any moment in some apps that are always running, such as memory cleansers and battery savers. Alternatively, if a fraudster have a database of device IDs, they can generate clicks from their servers as if the clicks were originated from the list of device IDs.

2.Click Injection

Click injections are a clever method of stealing credit from both organic and paid traffic. Fraudsters utilize this strategy when they detect an install is in progress, and they can produce clicks right before the install happens to be the last attributed click before the install, and claim the credit.  It almost exclusively happens on Android, but over the years there have been some examples on iOS as well.

3.Install Farm

Install farms are genuine places where real devices are utilized to produce hundreds of installations manually. To produce the activity for which they would be rewarded, these fraudsters will click on adverts and install applications. With the device ID reset, and IP address modified, this method may be repeated to make it look as though many people are installing the same software. Some farms utilize ‘bots’ which are special codes to automatically click ads, install apps and reset devices; or they use emulator programs to run the same activity on their computers as if they are mobile devices.

4.SDK Spoofing

This sort of ad fraud happens when false install signals are being fed to attribution tool servers as if they are coming from real devices. Using  a ’man-in-the-middle’ attack, fraudster cracks the SSL encryption an attribution SDK uses, and understands the communication between SDK and its backend servers. The fraudster can then generate a series of fake installations or even fake in-app events for the targeted app.

If you want to learn more about the fight against ad fraud, you may be interested in our article “How to Prevent Click Fraud.”