Sportsbooks Under Threat: Fraudsters Targeting Mobile App Advertisers
By Richard Metcalf, Global VP, Sports Betting & Online Gaming, TrafficGuard
As more live sporting events make their comeback post-pandemic, sportsbooks have a big opportunity ahead of them. Valued at $76.7 billion in 2021, the global sports betting market size is anticipated to grow at a CAGR of 10.2% from 2022 to 2030, according to GrandViewResearch. As this market is evolving and becoming increasingly competitive, investing in their app advertising campaign is crucial for betting platforms wanting to increase their customer base.
The on-the-go nature of apps increases the level of entertainment for customers who can place live bets, anytime, anywhere, all from the convenience of their mobile. Mobile marketing also helps generate more traffic, boosts downloads and increases the number of bettors using the app.
However, apps are at risk of hampered user acquisition (UA), shrinking ad budgets and misattributed engagement from ad fraud which can cause serious losses. Betting and gaming companies cannot afford to suffer from low return on investment (ROI) and poor marketing performance as competitors equally increase advertising efforts to cash in on the growing market opportunities.
The Cost of Fraudulent Engagement
The increase of in-person events has increased the number of sports betting operators encouraging on-the-go betting within an app, making it easier for users to bet from their mobile devices.
Even eSports, which soared in popularity during stay-at-home orders and moved into the mainstream has turned to live conferences and tournaments and is making sizable contributions to the sports betting market. According to one report by Valuates Reports, the global eSports betting market is projected to reach $24.19 billion by 2028. As more and more ‘niche’ activities are offered by sports betting platforms, the potential target audience for companies will only grow further and marketing efforts with be increased.
And, although having a mobile app is a valuable marketing tool for increasing brand awareness and generating traffic, marketers in this industry face significant user acquisition costs, driven by a competitive market with limited differentiators and high-value promotions to engage new customers as a result. So much money invested then creates a huge target for cybercriminals, who fly under the radar using advancing methods to commit ad fraud. Apps create opportunities to capture new revenue streams through the ease of in-play bets and increase in user accessibility, but increasing advertising efforts to drive more mobile users also opens up additional routes for bots to infiltrate.
However, sports betting companies are not well-equipped to address the problems they face with ad fraud. Fraudulent activity can be perpetrated by a range of sophisticated methods like bot-driven installs or app install farms, which are banks of physical devices that click on ads, download apps to devices, and then open them to trigger install events. Companies also face attribution fraud, such as click spamming and click injection, which involves scammers fabricating fake clicks which are then credited to a legitimate user when they access the app. These methods all create misrepresented engagement results and mean bad actors get a payout without actually delivering genuine traffic.
Without an accurate understanding of which channels are genuinely driving the highest installs and clicks, gambling companies cannot delegate budget effectively. More money ends up being invested in mobile marketing channels that are not driving genuine results rather than in channels delivering genuine ROI. Companies can no longer afford to solely trust the data their MMP declares and ignore invalid traffic rates.
It is crucial that marketers operating in this industry proactively put themselves ahead of the fraudsters with increased visibility, accurate analytics, and real-time protection. In a competitive market, simply having an app isn’t enough to create a strong competitive edge. Betting companies need to go further and unlock more budget previously being wasted. They need advanced technology to mitigate fraud at the source.
The Power of Prevention
The industry's growth is showing no signs of slowing down. According to Statista, the sports betting industry is predicted to reach $114.4 billion by 2028, representing an increase of just over 86%. It is more important than ever for the betting industry to take advantage of the opportunities the significant growth has opened up and prevent fraudulent activity from going undetected.
Sports betting companies need to stay ahead of the fraudsters targeting mobile apps. Being aware of the challenges invalid traffic creates for app advertisers is the first step to preventing them. A one size fits all strategy is simply not going to work. By evaluating their processes to combat fraud, identifying the areas of budget leakage and adopting a clear strategy, they can avoid huge losses in budget.
By preventing fraudulent traffic, betting companies can:
· Lower User Acquisition Costs - Bots and bad guys often take up a sizeable portion of UA advertising spend, but verifying and validating traffic means advertisers only pay out for the engagement that matters.
· Increase Efficiency – Sports betting companies can make more informed decisions over crucial aspects of business such as the allocation of budget to increase their ROI.
· Prevent Misattribution – App marketers gain total faith in the validity of their attribution data.
· Boost Brand Awareness – By tackling invalid traffic at the source and optimising their mobile marketing strategy to user acquisition, sports betting companies get more exposure and attract a larger pool of authentic bettors.
Staying One Step Ahead
With growing investments and emerging competitors, the sports betting industry is becoming increasingly attractive to fraudsters. From the World Cup to the Tour de France, international sporting events are attracting huge surges in people accessing betting apps from the ease of their mobile devices.
In what should be an exciting and profitable time, gaming and betting marketers are in a vulnerable position. Without being properly equipped to deal with the extent of mobile ad fraud, the industry will fail to take its genuine share of profits.
Sportsbooks are prime targets for mobile ad fraud, but if they reclaim power over their profits, they’ll see their growth soar.