More than 500,000 smart speakers have been the target of sophisticated ad fraud costing advertisers north of $1 million per month.
Subbed the ‘FM Scam’, DoubleVerify said it is the second major global audio fraud scheme targeting audio advertising, following BeatSting, and was picked up by DV’s Fraud Lab using AI tech and human review.
During the peak of both schemes, the combined financial cost to unprotected advertisers exceeded $1 million in monthly spend.
FM Scam perpetrators falsify audio traffic using dedicated servers. They also spoof a wide range of devices typically used for playing audio content. This tactic enables fraudsters to blend their invalid traffic with legitimate traffic in attempts to remain undetected.
DV estimates that the fraudsters behind the scheme spoofed over 500,000 devices, including mobile phones, tablets, connected TV (CTV) devices, audio players, smartwatches and, for the first time, even smart speakers.
Fraudsters auction their invalid traffic through supply-side platforms (SSPs), exchanges and ad networks. DV’s impact analysis indicates that FM Scam generates up to 100 million ad requests monthly. In addition to defrauding advertisers, the fraudsters also are impacting the yield of quality audio sellers by siphoning money away from legitimate audio channels.
“Audio is rapidly becoming a lucrative target for fraudsters,” said Jack Smith, Chief Innovation Officer at DoubleVerify. “The range of players and devices used to stream audio content sets this environment apart from other media types. Fraudsters tend to focus on emerging media, like audio, that attracts advertising investments but lacks comprehensive measurement standards.”
FM Scam further blends in with legitimate traffic by mimicking the behaviour of a typical continuous ad session. Unlike BeatSting, which switches between devices after generating a certain number of impressions, FM Scam creates longer, uninterrupted sessions. This randomises the traffic pattern to appear more human-like, as opposed to delivering a consistent, fixed amount of impressions across devices.
When FM Scam emerged, DoubleVerify said its Fraud Lab quickly tied IP addresses used by the attack to a CTV scheme first detected in 2019. Some IPs were also associated with various malicious activities, including the spread of malware. The DV Fraud Lab immediately mitigated FM Scam’s attacks and has been continuously shutting down new variants of this scheme leveraging a proprietary combination of AI-powered technology and human review.
The full report is available for download here.
