The Ugly Truth About Mobile Click Fraud

Ahh yes, the rise of mobile marketing. With the explosion of mobile offers, mobile advertising networks and every affiliate jumping on “the next big thing” in performance marketing comes a full-circle cluster-fuck that will surely have your head turning 360′s like Linda Blair from the Exorcist. So while I won’t cover every specific form of mobile fraud (how could I, this shit evolves daily), I will go into explicit detail on forms of mobile click fraud, what to watch out for and ultimately, how to combat it.

Warning: What you are about to read might be a shocker to you. It includes information I’ve compiled as an Affiliate, Advertiser and Affiliate Network owner and being involved and managing countless mobile ad campaigns. Some of the information I will reference back to with anonymity because I’ve guaranteed these sources “complete confidentiality” that I would not reveal their identities. I’ve traveled all over the world to attend many marketing/advertising trade-shows and have made countless contacts whom I’ve personally addressed these issues to, most being managers, some being owners of the largest Mobile Advertising Networks in the world.

One thing is for sure, you’re about to read things about mobile marketing that have never been disclosed publicly.

In just a few minutes. You’ll understand why. Prepare for some batshit crazy ugliness in the mobile marketing industry.

First, let’s start off mild shall we? Or wait, no let’s just jump right into it.

ALERT: How about a scary survey result from Harris Interactive on behalf of Pontiflex at the end of last year going into the 1st quarter of 2011 that resulted in 47% (YES 47%) of mobile app users reporting that they click/tap on mobile ads more often by mistake than they do on purpose.

Result: Since most mobile advertising models charge advertisers by the click, just from this survey result alone is enough to strike fear into anyone running mobile advertising. Nearly half of the people clicking your shit didn’t mean to. How nice of them right?

But Wait: Not to scream conspiracy here but in a related survey at the end of last year, 71% of mobile app users reported back that they prefer ads that keep them within the app that they are using as opposed to ads that take them out of the app to a mobile web browser,

Conclusion: This information from this survey results in important considerations to be taken by affiliates and advertisers noting that people are turned off by advertising that causes them to stop what they are doing and disrupts their experience.

My Thoughts: I’ve generated and managed a lot of revenue in mobile marketing, this is just one survey but we’ll keep going down the rabbit hole here before I drawn my final conclusions. There is an absolute ton of money being made and will continue to be made in mobile. There’s no doubt about that, it’s the wasted advertising dollars that concerns me.

Now this is just one sector of mobile marketing (App advertising) but this is alarming knowing that people are reporting that they are clicking on ads by mistake and when they do click on ads that interest them, they don’t like it when ads take them into browsers. Little bit disturbing if you are paying by the click right?

The Criminal Element Of Click Fraud

Criminal? Absolutely. I’ve spent the last 3 years managing advertisers and publishers across the world to ensure proper compliance, etiquette and practical industry standards in advertising mobile media online. Let me enlighten you on something that is truly messed up.

Remember back in the 90′s with all the email spam? How about in the last decade with Click Fraud on Adwords, Yahoo and MSN?

If you were/are a pay per click marketer, even today you will understand where I’m going with this. How about all you that run Facebook ads? How many times have you had large click discrepancies?

Let me enlighten you to something that is very disturbing. There is a very scary reason why mobile advertising networks will not tell you exactly (or social or ppc networks for this reason) why advertisers will experience these “large bursts” of click discrepancies.

Much like the large Chinese and Vietmanese “click fraud rings” have dominated PPC fraud over the last decade a new “faction” of click fraud has now been born. You see, mobile is exploding. We as marketers know it but guess what? Criminals and frauders knew it before us. You see, they “follow the money” much quicker than us. That’s why by the time we got here and start tested out different mobile advertising platforms and models, we all started talking about getting fucked over on this network and that network, so on and so forth.

As the number of people using the mobile internet continues to rise rapidly, criminals are exploiting new technologies with increasing efficiency. To strengthen my points about how popular email spam (yes it’s illegal remember?) and PPC fraud, how about this?

With smartphones predicted to outsell PCs in 2011, the survey, commissioned by mobile security firm AdaptiveMobile, indicates that traditional spam email successfully persuades fewer than one in a million users to visit the site it’s advertising.

So-called “conversion rates” of mobile spam are often higher than one per cent, however, and one SMS text message spam attack can generate more than $10 million in just three days.

Just a few types of these scams includ sophisticated attacks that exploit smartphone capabilities to connect to the internet – the results include “click fraud” on adverts or mobile viruses. Simpler scams included SMS messages claiming the recipient have won a prize and fooling them into replying via a premium rate call or text. With spammers finding ways of avoiding the cost of sending bulk SMS, the traditional barrier to receiving spam on mobiles has been removed.

Remember: Marketers like us are consistently adapting. So is everyone else.

Where ever the money is, count on the sharks being there as well. Just remember, there are tons of species of “sharks”.

Within any industry, as long as there a way for money to be made (in this case, BILLIONS of dollars), the bad guys will be there to find and exploit every loophole they can. They have no regard for legit advertisers. You don’t put money in their pockets, the ad networks clicks do.

But wait what about the Mobile Ad Networks protecting me?

How many affiliate networks did you see that you thought you could trust this year only to find out they are fucking everyone over? I could drop at least a dozen names here. You think with hundreds of mobile ad networks they are really going to give a fuck about your mobile click discrepancies? You might be lucky to work with a great network or too but let’s remember, mobile is a booming and when an industry catches fire like this one has, you get the “Branders” moving in. You have no chance against branding dollars. I’ve seen 7-figure a month advertisers and affiliates get their shit pushed in by branders. Ohh, and these ad networks, well they love branders. You know why?

Because most companies paying out branding dollars are either:

1. Fucking retarded

or

2. Fucking loaded with cash

Case in point, how is Admob who is now owned by Google doing? Business is a boomin baby!

Ohh and just so you know, remember when I said people don’t like leaving the app from clicking on an ad and getting launched into a browser? Remember that when tapped, the typical AdMob ad in a native iPhone application will prompt the app to quit and launch the iPhone’s Web browser to display the ad. Oops…

Corporate Click Laundering – You Smart Bastards

I’ve got information that dates back to the summer of last year. God bless Microsoft. I can tell you something publicly you may not know. Microsoft is SUPER aggressive on tracking fraudulent activity. Lat summer they filed two lawsuits against a Texas operator with what was known as “click laundering”. This science related website was accused of using sophisticated methods to collect revenues from clicks. Malware was used to impersonate search engines and send unsuspecting users to fake domains. When the user visits the domain and clicks anywhere on a page, they are clicking on a hidden ad, and the advertiser pays for the click.

Now you may ask, but Ruck that is Pay Per Click fraud, not mobile click fraud.

I got 3 words for you. If a dumbass hillbilly marketer like myself can figure this out, what do you think really organized corporations, criminals and techies can do? Here you go…

Wireless Internet Cards

Now you’re traditional click fraud as we have come to know it is basically creating dummy Web sites to host online ads, peppering those ads with computer generated-clicks, and then collecting money from advertisers for those clicks. Now when they say “collecting money from advertisers for those clicks”.

What they really mean is…

Collecting those checks from the advertising networks they are signed up with.

Yes, ok we are clear now.

The clicking is often carried out by “botnets,” or networks of hijacked personal computers, harnessed together by a virus.

So how does traditional pay per click fraud tie into mobile click fraud through click laundering?

Well, at the end of last year, Click Forensics conducted extensive studies that started tracking large amounts of fraudulent clicks routed through mobile devices -> eg. Wireless Internet Cards. These clicks are harder to detect than those coming from wired computers because the wireless card effectively disguises the origin, lumping them in with legitimate mobile users under a single originating address.

Mother of god…

Mobile Is Still An Infant, And Everyone Is In A Rush

While at Adtech NYC I had discussions with a number of mobile advertising network representatives. Since leaving the Affiliate Network scene, I’ve been asked by a number of affiliate networks to join or at the very least consult them. Well, now the upward trend is Advertising Networks inquiring for consultations to help them out with fraudulent activity. Ugh.

Let me put it this way. While ad Adtech, I wanted to see how easy it was for me to start a mobile ad network. Within 45 minutes I had 3 of them that were exhibiting offering to broker inventory to me. I can tell you that the barrier of entry into creating affiliate networks was lowered so much it drove me the fuck out of that space with pure disgust.

Enter the realm of everyone creating an advertising network…

Ohh, and what’s all this craze about local advertising and mobile local search? Mobile search is considered one of the greatest opportunities for the future growth for local advertising, even though the current traffic through any single wireless provider seems insufficient for most companies to consider doing local-specific targeting.

The problem is that everyone is in a fucking hurry and not planning accordingly. Besides, I’ll say it again. If a dumbass hillbilly marketer like me can get offered to setup a mobile advertising network and have access to immediate inventory, how much attention are others who get offered such a deal paying towards best practices, compliance and advertiser protection?

My guess…Not very fucking many of them. It’s all about the money right?

Ohh but wait, we can’t forget technology either. PPC works pretty good on the web right? For the most part yes. PPC as a product concept works well, but from a technical perspective it doesn’t work the same on wireless platforms as it does on the web. Basically, the content that is delivered via cellular platforms actually reduces some of the key elements that we as the Internet Advertising Industry have been using for years to filter out invalid/fraud clicks.

What Most Advertisers Don’t Know And Mobile Ad Networks Won’t Tell You

IP’s – Mobile users can connect to the internet, but their carrier provides radio signal connectivity between the users and their local cell tower. And the cell tower likely connects through telephone land lines to a central proxy server which then connects up with the internet. That central proxy would make all cell users on a particular carrier appear to come from the same IP address when requesting pages and content from the internet. 3G, 4G, WTF G! Don’t even get me started outside of the US.

GEO – ^^^ Since a number of geolocation data providers can only map users through geographic locations associated with their IP Addresses, this signal may not be available, either. The typical geolocation data for a user’s click might reflect the wireless provider’s internet proxy server location, instead of the actual location of the user. Again, don’t even get me started outside of the US.

Cookies – A lot of older wireless devices do not support cookies, and contemporary devices that do may have a very low limit on how many total cookies may be stored on the devices (such as only four). Users themselves may be able to adjust mobile browser settings to disable the cookies. So, cookies may not be available for the purposes of identifying and differentiating individual users. I delete mine all the time LOL. Again, who knows what goes on in other countries.

Now, some carriers may be able to make up for the loss of the IP address in some way. After all, each wireless provider must have the ability to tell one cellphone user apart from another for billing purposes. Those carriers might be able to pass some unique identifier over to the ad network such as the user’s account ID, and the user’s phone number or an encrypted version of their phone number. Unfortunately, encrypted phone numbers and account IDs are likely not equivalent in worth to IP addresses, because the ad network would have no way to properly audit the individual user identification to ensure that they’re not being cheated — such as by delivering fictitious ID numbers along with automated clicks. If they passed the users’ phone numbers, that would be ideal, since the phone numbers could be actually called if in-depth auditing were conducted in order to ascertain that each number represented an individual user.

Want to talk legal for a minute as a carrier?

How about this little diddy…

I would almost guarantee carriers would refuse to provide the bare phone numbers to their partners for competitive reasons, or due to internal business rules set to safeguard consumer privacy and protect from telemarketing calls. So, the phone number might not be allowed for use in click assessment due to legal reasons or internal business rules.

Now I am not pointing the finger at anyone, (even I probably should) but I would like to think most companies are legitimate and would never allow such practices which would expose them to liabilities by cheating advertisers. However, these companies are being paid (some are, depending on their own models) in referral fees for the ads they are delivering through devices, so this means what?

Pick your poison…

You either have a problem with trusting them or you don’t in the idea that these companies are not inflating clicks.

Mobile Advertising is still a baby. The lack of transparency, and literally no industry standards to abide by make me very cautious when approaching and testing mobile ad platforms. Right off the bat, you already have me mistrusting you by many of the existing click-fraud detection ability of the industry which can’t be escaped due to the limits of technology and the need of the ad networks to keep their detection methods secret. As things currently stand, actual practice is likely all over the map, with different methods pushed by each of the different wireless carriers themselves. With everyone beating down the doors to be allowed access to the customer base of these wireless providers, the providers are in a position to push solutions that are easy/advantageous for themselves.

Now, in closing here, I want to point out that with the lack of Javascript, cookies, different mobile handsets and browsers, that’s exactly why this fraud can easily occur. On the web, that’s what traditional analytics use to collect stats for you to look over and study.

This is just some of the Mobile Click Fraud that’s going on. I couldn’t possibly begin to start covering some of the under-handed and shady tactics that I’ve personally seen and witnessed among some of these networks. Besides, in the world of the Internet, I’ve had more slander and libel suits slapped on me than I care to talk about.

However, hopefully this opens your eyes a little bit more towards the mobile marketing industry and help you to possibly take some preventive measures to keep a few dollars more in your pocket and most importantly, turn a higher return on investment.

Very soon, I’ll give out some info on how to protect yourself specifically in mobile marketing on how to avoid some of these issues and what you should ask Ad networks specifically before running any advertising with them.

Pay It Forward Thanks!

Comments

  1. says

    Good writeup, and something I've been curious about. I'd be interested in hearing your views on combating this type of stuff. It is quite a difficult situation to deal with, and over time it will improve as prices go up and ad companies get more reputation.

  2. says

    Holly hell Ruck… I can’t believe it, I clicked through from Affbuzz expecting an InfoGraphic and BAM you WOW’ed me once again… this is why you will remain KING and guys like me will just be playing catch up.

    Anyhoo enough blowing smoke up your skirt.

    I posted about the first hand click fraud experience I had. It’s so obvious that its almost painful. 500 reported clicks and zero showing up in my tracker just from one site id alone wtf (others were almost 1 to 1)

    The only true remedy I found to date is to be aggressive about eliminating bad pubs from campaigns. Most networks will pass through pub ids and if they don’t I flat out don’t work with them anymore.

    As for the part about building out a mobile ad network, trust me its NOT as easy as you think. Yes everyone has the traffic but who has the technology to serve those ads efficiently across all devices. Oh wait and do it in a cost effective manner.

    If you think that is NOT a barrier to entry I don’t know what is. If on the other hand you’re sitting on a mountain of mobile inventory that you can effectively parse by by all the mobile targeting then you know my email ;) lets make some money

    • Imgrind says

      Hey man, thanks for stopping by an offering the constructive input. 500 clicks an none in tracker. We have seen it to man an yes the remedy at this time is to eliminate by id.

      And another point you touched on was being aggressive on elimination. We’ve literally had to babysit campaigns in dating, gaming and anything short form under $3 payout whereas more flexible on our own product and list we promote.

      You’re right that it isn’t as easy however i should have made that clearer as i speaking from my personal experience an perspective in being able to easily employee the tech needed to deliver on phones an devices. ( maybe i should edit an be clearer there)

      Much like affiliate networks literally white labeled an whored out there software, we will see a trend of ad networks do it as well. Eg yabuka grabbin sources from pulse, sitescout in cpc an display. Same will continue but at a much faster rate for mobile ad networks

      Thanks for catchin those points, i will edit and make it clearer so i dont confuse anyone. I’ve got inventory, more than we can test an people i trust. I’ll try puttin somethin together for ya over the weekend

  3. says

    Ruck, I commend you and shared this article gladly. I got into mobile traffic over 3yrs ago and made some of the same conclusions, even posted about some of them. It fell on deaf ears. Even now with the 'fever' that is mobile/tablet space. I cant believe how some serious 'elephants' in the room are being over-looked. I too, also, hope this wakes some people up and start asking some serious hard questions. Like "why is it that server-to-server (S2S) is not the standard in mobile tracking ? How is it that apps producers are allowed to put ads next to control icons thus causing 'accidental' clicks and basically a form of 'click fraud'. etc. etc. Best article written bar none.

    • Imgrind says

      Thanks man. I'm heading out to idate tonight but when imobitrax is launched, these mobile networks won't be able to do anything BUT pay attention.

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