In 2018, Adjust rejected over 250 million fraudulent installs in 2018, of which 46% were paid traffic sources. Schemes that spoof ad engagements for real users were the most prevalent, with methods like click spam (25.5%) and click injections (47.6%) dominating SDK spoofing (17.3%) and fake installs (9.4%).
Apps categorized under dating, shopping, and banking topped the charted in terms of being affected by app install fraud, with Adjust believing that apps that have a high cost per action (CPA) are targeted by creators of fraud. Data from Liftoff suggested that CPAs vary significantly depending on vertical.
“As more advertising dollars flow into mobile marketing, it’s not surprising to see fraudsters focus their efforts on stealing ad attribution from advertisers in-app categories with significant consumer spend,” said Dennis Mink, VP of Marketing at Liftoff, as quoted in the report by Adjust.
According to Adjust, one of the ways to discover the sources of CPA fraud is to set up a campaign that pays out for triggering a single event, but that real users can’t complete. Sting operators should then track the sources that trigger this event and discover which sources are spoofing, and which ones are legit.
By 2019, the losses caused by app install ad fraud could reach $12.6 billion in 2019, according to a report by Scalarr. This would represent 26% of the total mobile advertising spending, according to the mobile ad fraud detection company, adding that 65% of apps will have over 19% of fraudulent installs in 2019.
Similar to the findings from Adjust, the report from Scalarr concluded that the verticals with high CPA rates and rigorous competition, such as e-commerce, shopping, finance, entertainment, and games, were the targets for app fraud.
“Last year Joom tested more than 160 different affiliates and we have switched
offmore than 120 of them because of the significant share of fraudulent installs
in their traffic,” said Mikhail Biteryakov, Traffic Analyst at Joom. “All of them claimed their traffic was 100% human, reassuring that they don’t tolerate fraud and that they are checking every single source they use.”
The study from Scalarr found four new types of fraud, namely attribution fraud, device farms, mixed fraud, and smart bots, adding that many mobile advertisers may not quite realize that mobile app install fraud has become virtually undetectable without professional tools.
According to Dr. Augustine Fou, an anti-Ad Fraud Consultant, most parties in the current ad-tech ecosystem don’t want to solve the problem. According to his research, middlemen in the ad tech ecosystem make more profits when there is more volume of impressions flowing through their platforms. In addition, advertisers and agencies are eager to buy more impressions are lower CPMs, and purchasing ad fraud detection software represents an admission of guilt.
“Once marketers start to look into it themselves and not just blindly trust what their agencies/vendors and fraud detection tech companies tell them, they will start to see where the fraud is still getting through,” said Dr. Fou in a LinkedIn blog. “Then they can take a more active role in the reduction of ad fraud themselves, like turning off suspicious sites and apps, so they can’t steal ad budget anymore.”
Dr. Fou added that when P&G cut their digital advertising budgets and digital reach, they experienced no change in business outcomes, adding that if digital ads don’t drive any incremental business outcomes, there is no reason to invest in them. He says that CPG companies that operate on razor-thin margins could gain by seeing those digital advertising budgets flow to the bottom line, cutting off the need for exposure to fraud.
He concluded that as long as the disconnect between sales and marketing continues to widen, and the latter values impressions, reach, and low CPMs over driving business outcomes, the white-collar criminals of digital advertising fraud will continue to prevail and thrive.