App installs: over 5% of mobile app install adverts are fraudulent

Over 5% of app installs from non-premium ad networks are fraudulent, costing mobile marketers around $300 million in ad spend each year. That’s according to a new report released by DataVisor.

The analysis is based on 140 million app installs and 11 billion user events between January and May 2017. DataVisor focused on analysing fraud from over 490 ad networks and publishers.

Overall, mobile app install advertising expenditure reached $5.7 billion last year and made up 12.5% of total mobile ad spend. The growth in the market is presenting a growing opportunity for savvy fraudsters to increasingly navigate around detection rules and drive app install ad fraud.

With the mobile advertising strategy having shifted toward cost-per-install and cost-per-engagement measures, fraudsters have been able to insert themselves into the ad supply chain as fake sub-publishers to steal clicks and installs. A variety of technologies such as install farms, mobile phone emulators and click injection have been used.

Although premium publishers and ad networks are able to limit their supply to high-quality sites, they often charge a much higher price. This adds to the complexity of the issue with smaller marketers finding it harder to meet targets.

The report highlights that fraud is happening across the entire ad ecosystem. Indeed, 11 out of 15 tested non-premium ad networks had a fraud rate greater than 4%. Just one of the networks had a fraud rate below 2%.

Fraud rates, however, tend to vary by campaign. The study found that some campaigns had a fraud rate below 10% whilst others saw rates above 90%. Factors which affect fraud rates include targeting strategy and flighting schedule. Overall, the findings mean that although an ad strategy may be working well for one campaign, that does not mean that it will work well for another.

It is important for developers and advertisers to remember that fraudsters are quickly adopting their methods. That means that fraud rates can actually fluctuate and it becomes more difficult to find a reliable ad network. The graph below shows how fraud rates across three ad networks vary over time.

The study also took a closer look at fraud rates by country. Among those with the highest fraud rates were developed countries such as North America and Europe – likely driven by the higher payouts. India and Russia are also popular targets, which is in line with recent research by TUNE.

However, if you’re now thinking of just blocking an ad network or country – it’s not that easy. Some ad networks have different hot spots of fraud, whilst others show more consistent percentages of fraud. For example, Italy was seeing higher rates of fraud across all tested networks, whilst Ad Network 1 remained low in terms of fraud in most countries apart from Indonesia.

It appears though that fraudsters do prefer some devices over others. For example, older Android models tend to be preferred since they are more cost-effective for use in install farms. Generally, Android devices may be easier to hack than iOS devices.

Overall, Android devices were used for fraud 5x more than iOS devices and fraud rate on Android averaged 5.8% compared to 3% on iOS. However, both of the newest models of Android and iOS devices had relatively low rates of fraud.

Interestingly, DataVisor noted that more fraudsters were now focusing on install retention. Whilst traditional retention fraud sharply dropped after day 2, sophisticated fraudsters commit to a much longer retention period, which makes them harder to detect.

Similarly, engagement is also being actively faked. One analysis found that fraudsters had generated an even number of in-app events, which may have been scripted.

Ting-Fang Yen, director of research, DataVisor, explains:

“As we look at fraudsters across various industries, one thing remains the same – there are more tools available than ever for sophisticated criminals to skirt detection and they are taking full advantage of them.  As more money is poured into mobile advertising, the incentive to try and steal it grows. Mobile marketers around the globe have to be vigilant in protecting their ad spend and making sure the users they pay for are legitimate, otherwise millions of dollars are wasted on fake users, seriously impacting both your budget and bottom line.”

Unfortunately for app install advertisers, fraud is a pervasive issue of the mobile ad ecosystem. Although marketers can adopt improved attribution technologies, fraudsters are quick to keep up and mimic behaviour of real users to evade detection.