Advertising attribution firm, AppsFlyer has released its annual fraud report; The State of Mobile Ad Fraud 2020 Edition. It finds that overall app install ad fraud has dropped 30% to $1.6 billion – a 30% year-over-year decrease, averaging 13.2% in H1 2020.
Key findings include:
- The US experiences low rates of app install fraud: 3.4% is the average fraud rate in the US, 75% lower than the 13.2% global rate.
- APAC markets, which are traditionally more exposed to ad fraud, are responsible for nearly 60% of financial exposure worldwide —a total of $945 million. Having said that, there has also been an improvement in APAC, particularly in Southeast Asia, dropping 50% in April-June 2020 vs. July-September 2019.
- Gaming apps are largely succeeding at beating fraud. 32% of non-organic installs are fraudulent among non-gaming apps, while gaming apps see a much lower rate of 3.8%. Among non-gaming verticals, finance (48%) and travel (45%) suffer from the highest fraud rates, due to high cost per install rates and large marketing budgets.
- Android is the platform of choice for fraudsters. The app install fraud rate on Android is over 4.5 times higher than it is on iOS. Android devices dominate worldwide in terms of market share and have fewer restrictions on apps, making them likelier targets.
- Bot attacks continue to dominate. 62% of fraudulent installs are a result of bot attacks. However, other methods, such as install hijacking (particularly for gaming apps) and click flooding, are on the rise, with click flooding up to 21% in APAC.
- Post-attribution fraud is on the rise. This type of advanced fraud — installs that cannot be blocked in real-time — climbed to 24% globally in January and February, and in the US, peaking at 51% of apps in March. There has also been a substantial increase in in-app fraud, especially among gaming apps, as fraudsters eye lucrative cost per action (CPA) payouts on top of cost per install (CPI) payouts.
The Coronavirus effect
The only significant exception to the downward trend in ad fraud occurred in March, as COVID-19 forced many countries to implement strict lockdowns. While people remained at home, the demand for mobile apps spiked, leading to aggressive user acquisition activity, and fraudsters were drawn in to try and reap the rewards. As a result, the fraud rate in March increased by almost 25% compared to February. These attempted attacks were unsuccessful, leading to a similar drop the following month.
Use of social apps jumped during lockdowns, leading to an increase of 12% in fraud in the US. In some verticals, such as entertainment, app marketers were able to meet heightened consumer demand while keeping their apps relatively safe from fraud.
Entertainment app fraud in the US held steady at 4% throughout the stay at home period. It’s clear that while the pandemic has brought many changes, it is still possible for the industry to continue the positive trend of declining fraud.
Even though the mobile ad industry has grown exponentially to defend itself properly against ad fraud, the potential amount of damage is still extremely high and fraudsters will always want a piece of the pie. With businesses and consumers continuing to turn to mobile apps for daily tasks and entertainment, advertisers should remain vigilant in their efforts of leveraging these key insights around ad fraud in order to not only keep fraudsters at bay, but to also limit the amount of financial exposure as newer fraud methods appear.
Doug McMillen, Vice President, Enterprise Strategy, AppsFlyer