Examining the State of Mobile App Fraud


Mobile app fraud remains a significant threat, costing the industry millions, if not billions, of dollars annually. Despite considerable efforts to combat it, fraudsters relentlessly seek new ways to exploit the system. The pandemic-driven surge in app usage in early 2020 provided a fertile ground for these bad actors.

The fight against mobile app fraud continues to evolve, with recent reports revealing new trends and challenges. AppsFlyer’s 2023 report, analyzing 22 billion installs, showed a 40%+ increase in fraud in the latter half of 2022. This comprehensive analysis provided insights into fraud trends across platforms, categories, and countries, highlighting the persistent and evolving nature of install fraud​​.

iOS vs. Android: Which Has Better Fraud Protection?

iOS maintains its lead in fraud protection, but Android’s larger market share and global reach offer a wider playing field for fraudulent activities, resulting in a higher fraud rate. However, most apps now have robust protections due to heightened fraud awareness, although sophisticated fraudsters continue to exploit vulnerabilities.

Apps at Greatest Risk of Install Fraud 

Contrary to expectations, finance, travel, shopping, and entertainment apps face higher install fraud risks compared to gaming apps. This is due to their higher cost per install (CPI) rates and larger budgets, making them lucrative targets for fraudsters, despite gaming apps employing advanced anti-fraud tools.

install fraud rate by vertical

Image: AppsFlyer

Common Mobile App Fraud Methods

  1. Bots: Cybercriminals’ preferred tool, automating fraud to create fake users at scale.
  2. Hijacking: Prevalent in gaming, hijacking installs from legitimate sources.
  3. Click Flooding: Networks report fraudulent clicks to claim credit for installs​​.

 

Bots are the fraud weapon of choice for cyber-criminals. Bots automate fraud, so it makes their job easier. They create fake users instead of stealing the identity of real users to prevent exposure. They can scale fast and do serious damage.

Hijacking is still prevalent and happens most often in gaming. Click flooding is another tactic. It occurs when networks intentionally report a large number of fraudulent clicks to take “credit” for the final click before the install.

A popular shopping app fell victim to a click flooding scheme, where fraudsters generated a high volume of fake clicks to claim attribution for organic installs. By implementing a real-time fraud detection solution that analyzed click patterns and device data, the app was able to identify and block the fraudulent activity, saving over $500,000 in ad spend.

The Growing Threat of Mobile Malware

Mobile malware remains a significant concern, with fraudsters using tactics like app masking and leveraging suspicious apps outside official marketplaces. These pose red flags for fraud detection systems​​, emphasizing the need for robust security measures.

The Financial Impact of Mobile App Fraud

Mobile app fraud’s financial implications are staggering, with estimated global losses reaching billions of dollars annually. For businesses, the costs extend beyond direct financial losses, encompassing wasted ad spend, skewed performance metrics, and damaged brand reputation. Investing in robust fraud prevention measures is crucial to mitigate these impacts and protect long-term growth.

Mobile Ad Fraud Trends and Future Expectations 

The AppsFlyer report indicates an alarming increase in fraud attacks, underlining the importance of vigilance and proactive protection. The shift towards in-app fraud presents new challenges, requiring apps to run more campaigns focused on reducing churn and increasing retention​​. While the industry is unlikely to eliminate fraud entirely due to its complexity and profitability for fraudsters, collaborative efforts and advanced technologies offer hope.

Best Practices for Protecting Your App Against Fraud

  1. Implement robust fraud detection solutions utilizing machine learning and AI.
  2. Regularly monitor and analyze app install and engagement data for anomalies.
  3. Establish clear guidelines and thresholds for identifying fraudulent activity.
  4. Partner with trusted ad networks prioritizing fraud prevention.
  5. Stay informed on the latest fraud trends and adapt defenses accordingly.

AdAction’s Proactive Approach to Fighting Mobile App Ad Fraud

In the ever-evolving landscape of mobile apps, the threat of ad fraud looms large. At AdAction, we understand that combating this pervasive issue requires a proactive, multi-pronged strategy that leverages cutting-edge technology, fosters industry collaboration, and draws upon the expertise of seasoned professionals.

Our team has redoubled its efforts to fight mobile app fraud head-on. By employing advanced detection technologies and real-time monitoring, we swiftly identify and mitigate suspicious activities at their source. Our commitment to industry cooperation is exemplified by our active role in the Coalition Against Ad Fraud (CAAF), where we work hand in hand with partners to develop robust, collaborative solutions. Additionally, we’ve been recognized for our efforts by earning a spot on the Singular ROI Global Fraud Leaders for Android list. 

As we navigate the future of mobile app advertising, AdAction stands resolute in our mission to safeguard the integrity and profitability of our clients’ campaigns. Our state-of-the-art tools and deep well of industry knowledge position us at the vanguard of the battle against ad fraud. By partnering with AdAction, app developers and advertisers can rest assured that their investments are shielded by the most effective fraud prevention measures available.

Together, we can cultivate a mobile app ecosystem that is not only safer and more secure but also one where innovation thrives unencumbered by the specter of ad fraud. If you’re ready to take your app’s growth to the next level with confidence, our team is here to help. Contact us today to learn how AdAction can protect your app from fraud and unleash its full potential.



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