Mobile app fraud has grown 30% in a year and now costs advertisers over $700 million: AppsFlyer

In the first quarter of 2018, mobile app marketers were exposed to over $700 million in ad fraud, according to a new study from AppsFlyer.

The findings follow a study on device ID reset which found advertisers were losing over a billion dollars annually to click injections and app spoofing.

Advertisers with mobile apps in the shopping, gaming, finance and travel categories are the hardest hit, with over $275 million exposure impacting shopping apps due to the high cost per install attributed to them.

Unsurprisingly, fraudsters primarily target verticals that have set benchmarks for having the highest costs per install, with 60% of the top ten targeted nations being from the APAC region.

Compared to the 2017 quarterly average, mobile app marketers were exposed to 30% more fraud, with the share of fraudulent installs growing by 15%, tainting 11.5% of all marketing-driven installs.

This means that 115 out of 1,000 app installs are fake, factoring in the cost of media and third-party attribution market share.

Replacing device farms as the most popular tactic with fraudsters, bots were responsible for over 30% of fraudulent installs, the study found.

Asia Pacific

Paul Michio McCarthy, director of sales for the APAC region at AppsFlyer, said Singapore was the hardest hit by fraud in Asia, with app install fraud rates hitting 27%.

"Singapore and Indonesia feature high rates of mobile penetration, and in Indonesia’s case, mobile is often the only screen many internet users view content through," said McCarthy. "Mature markets such as Singapore attract fraudsters because it has high-value users with a high payout."

While known bot patterns are easier to track and deal with, traditional fraud detection does not work on newer patterns, he says.

"We need to analyze post-install behaviours, such as event type, volume, and engagement patterns," said McCarthy. "This process will help to identify fake bot clicks and attribute them accordingly in advertising campaigns."

However, fraudsters are quick to adapt to new protective measures, which means mobile app marketers need to be quick to insert corrections, detect fraudulent activities, and never hesitate to react, he added.