Advertisers stressed out by ad fraud have a new source of concern to contend with: Rogue apps that could be running nearly a billion dollars worth of ads that aren't seen.

According to online ad fraud detection firm Forensiq, thousands of iOS, Android and Windows Mobile apps are running ads that aren't being displayed to users.

Over a ten day period, the company observed that apps registered up to 20 unseen ads per minute and consumed up to 2GB of data per day due to ad fraud.

All told, Forensiq estimates that advertisers are losing 13% of their mobile spend to ad fraud, putting the total cost of mobile ad fraud at $850m per year. Victims include large brands such as Coca-Cola, Mercedes-Benz and Unilever.

Perhaps most worrisome is the fact that such losses are occurring despite the fact that, according to Forensiq, just 1% of devices in the US are running apps engaged in ad fraud.

One of the reasons for this is that some apps are able to start calling ads in the background when devices start, so device owners don't even need to be engaging with these apps on a regular basis for fraudsters to gain.

Not a big deal?

In the wake of Forensiq's report, Google has suspended a number of apps but just about everyone agrees that companies like Google face an uphill battle in keeping fraudsters in check. But just how big a problem is mobile app ad fraud?

The numbers look bad, but with some estimating that mobile ad spend will surpass $100bn in 2016, $850m in losses due to fraud would not yet appear to present a problem of crisis proportions.

What's more, as one former brand marketer recently discussed, advertisers are well aware that ad fraud exists and the rates they're paying for ads account for it.

That doesn't mean mobile ad fraud isn't a problem worth fighting, but if mobile ad fraud becomes even more of a problem than it is today, rates will probably adjust downward even more to reflect it.

With this in mind, keeping mobile ad fraud in check might be far more important to app makers and ad networks than advertisers.

Patricio Robles

Published 30 July, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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