AppsFlyer, the global attribution leader, today released its annual fraud report; The State of Mobile Ad Fraud 2020 Edition. As most mobile advertisers are increasingly aware of the dangers of app install fraud, AppsFlyer’s new report illustrates worldwide impact, including details on how ad fraud on Android is over 4.5 times higher than it is on iOS, and financial exposure for apps in the Finance vertical amounts to $630 million in H1 2020.
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“The decline in the overall fraud rate represents the market’s heightened awareness. However, fraud isn’t going away anytime soon. Vigilance is crucial as fraud methods are constantly evolving and adapting to solutions in the market. Staying protected and applying sophisticated anti-fraud solutions are still very much a necessity for all marketers,” said Michel Hayet, Fraud Expert, AppsFlyer. “With this report, advertisers have insight into why fraud rates are declining, and how they can continue protecting their brands even as new fraud methods appear.”
Notable Insights
- Global financial exposure to app install fraud in H1 2020 was $1.6 billion – a 30% year-over-year decrease. This is the result of a clear drop in the overall app install fraud rate, which averaged at 13.2% in H1 2020.
- 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.
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“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,” said Doug McMillen, Vice President, Enterprise Strategy, AppsFlyer. “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.”
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.
Usage 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.
The State of Mobile Ad Fraud: 2020 Global & US Trends is available at https://www.appsflyer.com/resources/mobile-ad-fraud-report/
Methodology
The State of Mobile Ad Fraud: 2020 Global & US Trends is an anonymous aggregate of proprietary global data from 7 billion app installs across 173,000 apps. Of this, 1.3 billion app installs across 33,000 apps, were specific to North America.
