Video ad fraud has been draining phone batteries

When is a banner ad not a banner ad? When it's a hidden video ad generating fraudulent advertising revenue while draining your phone battery and using your valuable data allowance.

As BuzzFeed reports, it's been discovered that in-app banner ads have been hijacked on a massive scale to generate revenue for fraudsters working within the digital advertising industry. The people who suffer are consumers and their devices, but also the app developers who receive complaints regarding how quickly their apps are draining phone and tablet batteries.

The fraud was discovered by two ad fraud labs, Protected Media and DoubleVerify. Fraudsters purchase cheap in-app banner display space, but then hide auto-playing videos behind the banner image users see. The video is never seen by anyone, but because it plays it's registered as viewed and therefore generates revenue for the fraudsters, and much more so than the banner ad does. It's the big brands that are paying, but unbeknown to them, they're paying for zero exposure of their products.

The video below demonstrates how the fraudulent video ads are hidden out of sight behind image banners:

As to the scale of this fraud, DoubleVerify gauged it at 60 million fraudulent video ads per month. The ad hijacking occurred on Twitter's MoPub ad platform, and Israeli company Aniview, which specializes in video advertising solutions, was highlighted as being one of the sources of those ads. The company's subsidiary OutStream Media was also identified by Protect Media as playing a part.

Aniview denies any direct involvement and has blamed "a malicious, unnamed third party" who took advantage of banner ads and code created by one of Aniview's subsidiaries. Aniview CEO Alon Carmel, told BuzzFeed that the company, "does not knowingly engage in any fraudulent activity" and that immediate action was taken, "we stopped this activity and started and continue an internal incident review."

Aniview isn't saying who the malicious third party is, but has since removed a number of employees from the company's website. They include Aniview co-founder Tal Melenboim and two employees who had leadership roles at OutStream Media. Melenboim has since denied being part of any illegal activity while at Aniview.

As Twitter's MoPub ad platform was used, Twitter has also triggered its own investigation after verifying the activity Protected Media reported. If Twitter traces this back to Aniview, then there will surely be consequences for the advertising company.

It's important to point out that this type of fraud isn't new, but a spike in activity back in October sparked the ad fraud companies to look more closely. Aniview also isn't the only company identified as taking part, with several others continuing to filter these hidden video ads into the digital advertising market. One of the companies Protected Media contacted responded with a complaint that everybody does it and it felt like they were being picked on.