A business without an online presence is a rarity these days, and in order to appear in searches and grow their customer base, they pay for ads and clicks. Naturally, where there is money involved, bad actors are also present.
Online ad fraud is a real issue that can do multi-level damage to a business not only by forcing them to throw money away for fake clicks, impressions, and purchases but also by skewing the data and derailing whole business and marketing models. Because of this, implementing quality software for detecting and eliminating ad fraud becomes crucial.
To discuss the challenges businesses that use online advertising face and the newest threats in the advertising landscape, Cybernews reached out to Dmitry Isakov, the CEO of FraudScore, a fraud detection and prevention software provider.
Tell us a little bit about your journey throughout the years. How did FraudScore originate in 2016?
I’ve been working in IT for more than 20 years. I graduated from the University with a computer science degree, and since then I’ve been managing and leading several IT projects and companies – from small startups and mobile apps to multi-million MAU online games publishing platforms with hundreds of thousands of global users.
I and my friends (future co-founders of FraudScore) started our journey in online advertising in 2011. From time to time, we were facing unexpected issues with our partners about the traffic quality. And it took a lot of effort for us to explore each campaign and traffic source, and negotiate. The tools that were present in the market at that time didn’t meet our requirements. So we started developing a tool that would help us detect fraud, and build our cases. Our partners showed interest in the tool – and we saw an opportunity, did some market research, and decided to pivot and launch an easy-to-use, reliable, and independent anti-fraud solution. As a result – we founded FraudScore in 2015, and since then FraudScore has been our one product, key brand, and top priority.
Can you tell us more about what you do? What are the main issues you help solve?
We fight against fraudsters in online advertising. FraudScore is an independent ad fraud prevention and detection tool. We work with both mobile and web traffic, and provide protection from ad fraud on every stage of the advertising funnel - starting from prebid & impressions level to clicks, conversions, and installs, as well as post-install events analysis. No matter what campaign you are running – impressions, clicks, installs, registrations, and even purchases – everything can be falsified.
FraudScore clients are direct advertisers (brands, game developers, etc), advertising agencies, ad platforms, affiliate marketing agencies, etc. Basically, when there is an online ad campaign and traffic involved – an ad fraud prevention tool is required.
And as I’ve already mentioned, FraudScore is an independent anti-fraud solution. That is a very important characteristic that I want to tell a little bit more about. In the world of online advertising – where traffic is demanded and purchased – the quality of the traffic is crucial. Results of traffic quality analysis must be recognized by the industry players. There are always two or three sides to the conflict when ad fraud is detected – an advertiser, a platform, and traffic sources (or others, depending on the situation). All two or three have to respond to the detected ad fraud accusations, and it’s highly recommended to have traffic quality analysis done by someone with a trustworthy reputation, reliable technology, and no bias. That is the part where an independent anti-fraud solution is required. And FraudScore is that kind of a tool.
What set of tools do you use to detect fraud without compromising the user experience?
FraudScore has its own know-how approach to traffic quality analysis and ad fraud detection. While FraudScore works on every stage of the ad funnel, we are able to detect (and even block) ad fraud both in real-time and while doing post-analysis.
FraudScore doesn’t work with a binary approach as some other solutions on the market do. Instead of a black-and-white verdict – “fraud” or “not fraud” – FraudScore applies a so-called “fraud score” method (hence the company name). Each install or conversion, channel, traffic source, offer, etc. gets a specific fraud score – an evaluation that shows the probability of ad fraud in each particular case, with a deep and detailed explanation of fraud patterns found. FraudScore analyzes over 150 metrics and fraud detection algorithms and provides results that are divided into four traffic quality categories: Good traffic, Low Index Fraud, Middle Index, and High Index Fraud.
This unique approach gives FraudScore’s clients a reliable way to build strong fraud cases and explain their position for every incident, while also allowing room for negotiations.
Did you notice any new cybersecurity threats arise as a result of the recent global events?
Money fraud, fake or stolen identities, falsified social accounts, phone fraud, and fake credit cards are only the tip of an iceberg. Fraudsters can be flexible, and they target vulnerable users, unprotected companies, and groups of people. The number of threats is rising and we predict that there is no chance that fraudsters will stop. Protection and awareness must be spread.
In regards to online advertising - fraud is appearing more and more on TikTok and Snapchat. CTV fraud is getting more attention. If there is a new (popular) source of users’ attention – fraudsters will be there.
You mention mobile advertising fraud as one of the most serious problems nowadays. Can you tell us more about this type of threat?
According to some international reports, an average user spent 4.8 hours a day on his mobile phone in 2021. In the last two years, mobile app usage grew by 36%. After the global pandemic happened, people started to spend more and more time online. A mobile phone became a tool to order food, study, communicate, work, etc. And advertisers reacted – more ad campaigns were targeted on mobile traffic. As a result, more fraudsters moved their efforts to mobile.
According to FraudScore’s statistics, 33% of global mobile ad traffic was fraudulent in 2021. It means that at least every third click was done by fraudsters!
So as advertisers put more investments into mobile ad campaigns, the damage that they suffer from invalid traffic, stolen clicks, and fake impressions is growing. Operating in the environment of online ads without ad fraud protection becomes riskier. That is why FraudScore tries to promote the idea that mobile ad fraud is a very serious issue that advertisers, ad agencies, and ad networks need to deal with, and never be afraid to double-check the traffic quality.
Besides fraud protection, what other tools do you think can greatly enhance marketing operations?
As we are focused only on the ad fraud fights, I can try to answer this question from this point.
First, marketers and traffic specialists need to be able to focus on their everyday tasks – contact with customers and traffic sources, developing creatives, exploring new marketing solutions and approaches – and don’t spend their resources and time on reading tables and reports for detected ad fraud.
Managers need to have all the tools that make their job easier – and companies need to provide their teams with such tools. For instance, when it comes to traffic quality, there should be an easy-to-understand picture of detected ad fraud, campaign damages, and clear reasons about what happened. The easier it is for the manager to understand the situation, the more time he has on negotiations and his direct tasks.
Also, it’s important to never let your guard down. Even if there is a trustworthy traffic source and a long-time partner – traffic still needs to be checked. Never underestimate fraudsters. They come up with new types of fraud and malicious schemes, and even trusted sources might suffer. So always keep your shields up, and make sure your reputation (and budget) is protected.
In your opinion, which types of organizations or individuals are attractive targets for fraudsters and should implement proper security measures as soon as possible?
Just to illustrate, let’s take a look at international forecasts: global ad fraud might cost advertisers at least $150 billion by 2025. Ad fraud is here, it’s real, and it’s a part of the global online advertising environment. FraudScore’s annual report for 2021 reveals that 31.8% of global online ad traffic was fraudulent. We can sum it up: if your company is working with online campaigns and buying traffic, you need an anti-fraud tool. There are fewer and fewer opportunities for companies to operate without any kind of protection against fraud, or without a deeper understanding of the issue.
But only one in five advertisers acknowledges the problem of fraudulent traffic and deals with it directly with some anti-fraud tools. Some advertisers are so afraid of fraud that they stop working with a source the moment ad fraud is detected. But the issue of malicious traffic and protection against it is way more complex.
The FraudScore team always recommends not to be afraid to deal with bad traffic, read the data and build your ad fraud cases and protect your business.
Talking about individual users, what security measures do you think are essential for everyone nowadays?
One of the most simple yet important recommendations – always use (and install) official apps, don’t install apps from unknown sources (links or attachments, etc). And don’t forget to take a look at the reviews and ratings.
We also recommend keeping an eye on the parameters of your phone, the battery life in particular. It’s a known fact that fraudulent apps are consuming battery, and if your phone starts to die quickly, then there is a chance you have an infected app. For example, fraudsters have their own app developers, and they offer you to install such apps – Flashlight app, Calculator app, Credit card wallet app, etc.
And finally, what’s next for FraudScore?
Solutions like FraudScore are constantly developing and improving their algorithms to stay ahead. It’s an everlasting cat and mouse game. We should react quickly to every new threat and develop updates.
For instance, this year we are planning to launch a serious update for our impression fraud solution that will allow us to detect many more threats.