Brief:

• The number of fraudulent apps surged by 159% in 2018 from the prior year, according to a report that marketing measurement firm DoubleVerify shared with Mobile Marketer. The strong growth of in-app advertising is giving fraudsters more incentive to create apps that generate fake viewership activity.
• Sophisticated invalid traffic (SIVT) impressions that are harder to detect doubled in 2018 from the prior year, per DoubleVerify. The company said 57% of fraudulent mobile apps are in the "games" and "tools and utilities" categories.
• "With ad spend increasingly concentrated in mobile — and particularly mobile app, fraudsters are redoubling their efforts to take advantage," Roy Rosenfeld, head of DoubleVerify’s Fraud Lab, said in a statement.

Insight:

Mobile advertising continues to surge, but unfortunately, that growth has invited fraudulent activity that robs advertisers of their media spend. Mobile ad spend is forecast to reach $87 billion this year, making up more than two-thirds of the overall U.S. digital ad market of $129.3 billion, researcher eMarketer forecast. As DoubleVerify stresses in its statement, it's "critical" for brands to understand the risks that fraud presents and allocate appropriate resources to safeguard their digital investments.

The most common forms of mobile ad fraud include ad stacking, app spoofing, background traffic, bots, clickfraud and retargeting fraud, MarTechSeries reported. In a recent example, a video fraud scheme targeting mobile app advertising ran video ads behind legitimate banners, generating at least 2 million ad calls per day, or at least 60 million ad calls a month, DoubleVerify's Fraud Lab found last month.

Major platforms have tried to tackle fraud, with different levels of success. Google has been responsive to removing malicious apps in its Google Play app store when mobile users report them, but the problem persists, including apps that claim to upgrade Android phones to the latest operating system, per TechRepublic. These malicious apps may bombard users with ads, spyware or malware that steals cryptocurrencies. Apple, which is perceived as having a "walled garden" that screens out malicious apps from the App Store, also has been susceptible to fraudulent apps, including one identified in December that tricked iPhone users into making purchases they didn't intend, per Business Insider.

On the larger landscape, IAB Tech Lab has worked to tackle mobile ad fraud by harnessing the collective expertise of technicians from cellular service providers, brands, ad agencies and programmatic ad platforms. Last month, the group released the final version of its app-ads.txt specification for implementation among mobile ad platforms. The app-ads.txt file has the name and identification code for authorized sellers of the app's available ad inventory, and helps to ensure that advertisers only bid on slots from authorized sellers. As DoubleVerify's most recent findings suggest, marketers need to be vigilant in monitoring potential fraud.