American Hustle

The idea of "phone farms" conjures up images of an off-shore warehouse filled with racks of connected devices perpetrating ad fraud at immense scale. However, Vice's Motherboard found a distinctly American, small-scale version of the same scam.

Hobbyists and those looking to make a bit of money across the U.S. have been doing the same, buying dozens or hundreds of phones to generate revenue so they can afford some extra household goods, cover a bill, buy a case of beer, or earn more income without driving for Uber or delivering for Grubhub.

The depiction of these farms isn't too far from any number of Internet-era arbitrage jobs that pop up on the fringes of the digital economy. Amazon nomads, who scour the big-box stores of America for product to resell on the giant Internet marketplace, were recently profiled in The Verge. It's a similar story of people looking to make a living, and the community that springs up to educate and support them.

When you put it like that, it doesn't sound bad. Strange. A little sad, maybe.

However, this is fraud.

Rather than actually watch ads, these phone farmers use as many as a hundred phones and sometimes automate the process to make it seem like someone is watching the ads in order to generate income.

These people are not responsible for much of the up to 23 billion dollars expected to be lost to ad fraud this year, but they are taking advantage of system in place that either looks the other way, or sometimes opens the door to this activity themselves.

Typically you don't get paid for watching or reading an advertisement on the internet. But an ecosystem of websites and apps flip that idea on its head. With a marketing strategy called "incentivized traffic," app developers take advertisements or other content that companies want to get in front of an attentive audience, and pay that audience to watch or interact with them.

This can be perfectly legitimate business: there's nothing wrong with someone deciding to be compensated for their attention by watching an advertisement or movie trailer in an app and getting some pocket change in return. Last year, NBCUniversal launched an app called WatchBack, which gives users a chance to win $100 in exchange for watching TV shows, in hopes of creating new fans for its programming. Other apps like Perk give viewers points for watching trailers and shows which can be exchanged for more valuable goods. Roy Rosenfeld, Head of DoubleVerify's Fraud Lab, a company which focuses on ad fraud, said DoubleVerify estimates in total these incentivized traffic "apps generate 100-300 [million] ad requests a month," with the vast majority working with video.

The article describes a cat and mouse game with apps and platforms trying to keep ahead of the farmer's illegitimate traffic. But as long as the industry is structured in such a way that they're beholden to that traffic, the incentives seem to favor the scammers.

What's clear is that winning the fight against fraud is going to take a concerted effort from all the players in the digital advertising ecosystem. It's an effort that will involve organizations like ours - which aims to educate and empower brand safety professionals - and others like TAG, who work at the organizational level, along with brands, publishers, and buyers and sellers up and down the food chain. The system is too porous right now, and this is just the latest example, even if it's a low-level example, of money being drained out illegally.

Photo via "Build your phone farm to 100 devices - The cheapest way possible!"