With $2.3B Exposed in H1 2019, There’s No Slowing Fraudsters
If you’re a mobile marketer, there’s no getting around it: proactively protecting your app against mobile ad fraud is an inevitable reality that is showing no signs of going away anytime soon.
According to our new State of Mobile Fraud [H1 2019] report, app install fraud is once again on the rise, growing 60% from March 2019 to reach a 22.6% share of installs in June 2019. Additionally, not only are fraudsters once again grabbing an increasingly larger piece of the pie, but they’re doing so at a significantly faster pace than we’ve seen in the past.
As we can see, starting in April 2019, the wave started rising once again as app install fraud evolved: from device farms with physical devices to device emulators, from fake SDKs and apps to real SDKs and apps, and from copying an existing SDK message to faking open source operating systems using emulators.
A comparison of iOS and Android shows just how far apart the different platforms are as far as fraud is concerned. Not only is fraud on Android more than six times higher, its upward trend is double that of iOS.
Apple’s walled garden approach and strict vetting process for apps seeking to enter the store, creates a safer environment than the open Android OS. Android’s domination in Asia, particularly in India and Southeast Asia where fraud rates are among the highest in the world, also leads to significantly higher rates of fraud on this platform.
The news isn’t good in terms of money either – from H1 2019 alone, around $2.3 billion was exposed to app install fraud across all verticals worldwide. And that’s only the quantifiable part. The actual number is much higher: just think about the financial damage caused by optimization based on faulty data (for example, the bleeding cash cycle), or the loss of positive returns marketers could have enjoyed if they had run with non-fraudulent media partners (even if the money was returned after reconciliation).
Fraudsters are now also moving beyond the install to perpetrate fraudulent in-app activity – for example, placing bulk orders to a shopping app, then cancelling within the allowed window to cash in on high CPA costs. In fact, we have found a 3x increase in the ratio between fraudulent installs and fraudulent in-app events: from 1 install generating 0.9 events in Q4 2018, to 2.7 events in Q2 2019, with most of the rise driven by gaming apps.
As anyone who truly understands fraud knows, not all fraud can be blocked in real-time. The main reason for this is that some advanced fraud schemes cannot be identified based on individual actions of a script or bot, but only as patterns emerge at scale that contradict standard post-install user behavior.
In these instances, fraudulent behavior that is not identifiable as such on its own needs to be flagged retroactively by advanced algorithms once critical scale of data has been reached. Once identified as fraud, any future installs with these attributes can be blocked in real time. Based on AppsFlyer’s estimates, the rate of post-attribution fraud that can only be detected post-install is currently at 16%.
The Bottom Line
The above insights are only a few of the key trends we see occurring in the mobile industry, but the overall message is clear: mobile fraud, both before and after install, is a significant threat to our ecosystem.
Fraudsters are finding new areas to attack, meaning no app is safe, especially on Android. In fact, we’ve found that 35% of Android apps have a fraud rate that exceeds 20%, compared to 17% of iOS apps.
Facing this reality, marketers must stay alert to suspicious changes in their app activity, and ensure their business has rock solid protection to prevent any damage by increasingly advanced fraudulent attacks.
To dive deeper into the trends and benchmarks of fraud — including vertical and geo breakdowns — download The State of Mobile Fraud [H1 2019] report today.