Blog Why do you need fraud prevention?

Why do you need fraud prevention?

In 2018, a BuzzFeed News investigation uncovered widespread and malicious fraud that affected millions of users. The fraud scheme, a devious mixture of SDK spoofing and bot fraud, managed to defund advertisers and networks from multi-millions of dollars. But this scheme wasn’t an outlier — it's a persistent feature of mobile advertising. And the problem is skyrocketing.

Many marketers don't view tackling fraud as their priority, and many more won't know they have a problem. People don’t want to talk about ad fraud; it's more difficult to admit budgets are being misspent on fraud than to flag that there could be a problem. And many inside the industry also benefit in one way or another, pushing the topic down the agenda. Fortunately, there is a way to stop fraud, which makes the problem that much easier to take on.

At its root, fraud never changes; it's been conducted in the same way since Adjust released its Fraud Prevention Suite in early 2016. But the dimensions have changed, and the methods have evolved. As budgets grow and fraudsters become smarter, your biggest priority should become stopping mobile ad fraud before you become a target for fraudsters.

Why is it an attribution provider’s job to detect and reject fraud?

Mobile measurement providers (MMPs) are necessary to mediate attribution between networks and app companies (described in detail here). Similarly, fraud prevention also requires a middleman to moderate the ecosystem. There are a few key reasons why that role falls on us.

A few bad apples spoil the bunch. In the App Economy, a handful of networks who knowingly sell fraudulent traffic tarnish the group. Many partners actively engage with anti-fraud solutions, but not all networks can be trusted to police their own traffic, or focus on delivering anti-fraud technology. It becomes the job of an MMP to analyze the traffic that flows through the system, and determine whether each install is valid or not.

Networks don’t have access to the same data as MMPs. Even if a network focused entirely on preventing fraud from their sources, other methods could work their way into the system. SDK Spoofing is a way for fraudsters to avoid detection by triggering real-looking installs, bypassing checks that only MMPs can create based on the data they have.

MMPs-as-middlemen help create trust between networks and advertisers. MMPs have nothing to gain from fraud, because fraud affects first-party data, effectively harming MMPs as well. The default stance for all MMPs should be to fight fraud in earnest, and from the start.

There are providers outside of the mobile measurement ecosystem who offer fraud prevention solutions, known as ‘fraud detection vendors’. Our network partners CrossInstall (now part of Twitter) wrote a detailed comparison of such companies versus the value of MMP’s here if you’d like to learn more about how we differ.

The five benefits of fraud prevention

There are five features of fraud prevention that make the solution a critical investment:

Saved budgets

Fraud prevention stops your marketing campaign budget from being spent on traffic that leads to nowhere. With campaign spend reaching into the thousands (or sometimes millions), making sure that your money is safe is paramount. Fraud prevention provides that security.

Clean data

Consider this scenario: Network A has a higher conversion rate than Network B, and users seem to stick around longer. This would naturally mean that you’d want to invest more in Network A. But you may not know that Network A’s traffic is riddled with fraudulent activity.

Andreas Naumann

Getting rid of fraud enables an advertiser to work from of real data and KPIs.

Fraud creates a downward spiral of poor decision making, encouraging advertisers to spend on dubious sources that seem to perform better. Fraud prevention exposes these networks, helping you to lower the number of risky decisions you make while finding niches in supply that work well.

Better options

Fraud prevention not only filters fraud, but it filters out bad traffic sources, helping you identify preferred partners that are right for you. Rather than spreading your bets across 20 or so networks, fraud helps you weed out the less-than-optimal choices, allowing you to identify the partners that power your success, while improving your relationships with them.

Marketers must remain vigilant to emerging methods of fraud, and work with MMPs to understand what’s out there. But having fraud prevention is far better than the alternative.

Secure brand equity

Capgemini Efma’s World FinTech Report 2019 surveyed banks and fintech providers to find the biggest issues facing the financial services sector. Significantly, security tops the list. The introduction of the CCPA and GDPR has made brands more vigilant than ever when it comes to user data — especially when brand equity is at stake when security is mishandled. It’s critical to combat fraud in all its forms, to not only secure brand equity, but also user data.

Boosting your competitive advantage

Switching your perspective can expose powerful incentives when it comes to fraud prevention. All of these advantages are open to anyone — not just you, but also your competitors. If your competition deploys fraud prevention, they’re acquiring better users, and more of them.

The app that filters fraud is guaranteed to be more effective in their acquisition, as well as reaching real users and driving share of voice up. And the party benefiting from fraud prevention will be spending more efficiently, saving budget otherwise lost to fraud in the first place.

As Andreas puts it: “This means your competitors can be very on-point in mitigating risk. And, even better, they know where they can compete against the brand marketers that are willing to pay higher CPMs naturally.”

What sets Adjust apart

Our approach is significantly different from other solutions in one key way: real-time prevention.

Real-time rejection is the only way to prevent fraud. Many solutions only offer “after-the-fact” detection, which works on the premise of letting you know when fraud is found. But this process means it’s up to you to speak to networks and argue over what and what wasn’t legitimate traffic. Not only is this process full of conflict, but it also takes time away from user acquisition. “It’s a big time sink to go backwards”, says Cyrus Lee, ex-Senior User Acquisition Manager at Playstudios, in a previous blog post. “The more fraud you buy, the more conversations you’ll have at the end of each month that go to a chargeback.”

“After-the-fact” solutions can also result in legitimate installs being flagged as fraud. Vendors who don’t provide real-time solutions can often create more false positives, even if the traffic is legitimate. With some methodologies hidden under ‘black-box’ technologies, challenging each and every install becomes impossible.

As a company, Adjust also thinks about fraud differently. Fraud prevention is at the center of Adjust’s approach and informs much of our decision-making, and has been since the beginning. A blog series on this subject was written by Adjust’s co-founder and CTO Paul Müller, which you can read here.

Responsibility and Accountability

Ultimately, taking on fraud is a big responsibility for an attribution provider. As our CTO says, “Since we reject ad fraud, we have to be willing to assume the responsibility for any attribution stopped by our system, and defend each and every one to our partners. We assume the burden that we have to get it right, every time.”

“Fraud prevention should not just be a marketing ploy, or a means to muddy the water - it’s a serious responsibility. If done correctly, anti-fraud solutions will advance the entire mobile ad ecosystem. If done poorly, it will end up as the snake oil of our industry and not address the core issue.”

Our commitment to developing anti-fraud solutions will always be a core part of Adjust’s mission. If you’d like to get in touch to find out how we can support you, find us here. If you would like to learn more about Adjust’s fight against ad fraud, you might be interested in our guide to mobile ad fraud. We also have a webinar dedicated to showcasing a common-sense approach to mobile ad fraud to catch up on here.

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