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AppsFlyer: APAC’s Mobile-First Economy Faces US$650 Million Worth Of Ad Fraud

Providing marketers with the most comprehensive report to date on the evolving mobile advertising industry in the region.

AppsFlyer, the global leader in mobile attribution and marketing analytics, released today its APAC Ad Fraud Report 2019, providing marketers with the most comprehensive report to date on the evolving mobile advertising industry in the region. Covering activity between the fourth quarter of 2018 and the first quarter of 2019 (November 2018 – April 2019), the report examines 2.5 billion installs across over 8,000 apps in Entertainment, Finance, Gaming, Shopping, Travel and Utilities.

  1. APAC region hit hardest by app install fraud – 60% higher than the global rate; Southeast Asia (SEA) in particular, has been exposed to US$260 million of app install fraud in six months,
  2. SEA’s mobile-first economies still lack necessary resources and face lower awareness to tackle fraud from bots, install hijacking, click flooding and device farms
  3. AppsFlyer’s APAC Ad Fraud Report analysed over 2.5 billion installs of more than 8,000 apps across APAC in mobile verticals including Finance, Shopping, Travel, Utilities, Entertainment and Gaming
  4. Attacks have primarily been carried out through bots and install hijacking, with click flooding and device farms still being a method that is in use but at a much lower rate. With the sheer size of SEA’s mobile users, device farms are deemed as being not as effective as compared to software hacks.

Over the last six months, had APAC marketers been left without protection, they would be out US$650 million. Southeast Asia has been identified as a key target for fraudsters, with over US$260 million at risk – the highest in APAC – with India’s financial exposure at US$186 million following behind. This follows Southeast Asia’s high mobile penetration rates, increasing connectivity quality, and rapid integration of e-payment methods, making it a highly lucrative target for fraudsters due to the sheer size of users and high payouts that these markets produce. The issue is further compounded by lower resources for app developers, the prevalence of fraudulent traffic in local networks and high marketer demand for volume.

Beverly Chen, APAC Marketing Director at AppsFlyer, said, “Southeast Asia is an attractive target for fraudsters, with marketers in the region tapping on the mobile-first and growing digital nature of the population to drive marketing priorities. Fraud distorts and pollutes the data businesses rely on to make decisions, resulting in a misinformed use of resources, ineffective spending and financial losses. To combat this, marketers need to have multi-layered protection solutions in place as well as understand and remain vigilant against the rising threat of bots, non-human traffic and the always-evolving techniques of bad actors in order to maintain their competitive advantage.”

Across the region, Finance and Shopping apps are the most affected, with Finance apps having the highest targeted ad fraud victims in the region at 48.1%, followed by Shopping apps and Travel apps respectively, at 32.2% and 29.7%, in line with the region’s growing consumer prosperity. Attacks have primarily been carried out through bots and install hijacking, with click flooding and device farms still being a method that is in use but at a much lower rate. With the sheer size of SEA’s mobile users, device farms are deemed as being not as effective as compared to software hacks.

Bots are the main players in affecting finance apps across all regions (52%), while install hijacking and click flooding are the preferred use of attack for other verticals. Also, the scale of the issue seems to be under-reported, as marketers in the region move towards a cost per action (CPA) business model to measure app effectiveness instead of a cost per install (CPI) model, with the infiltration and the sophisticated nature of ad fraud today, fraudsters have managed to infiltrate into the app itself making it harder to track.

Major takeaways from the report include:

  1. App Install fraud continues to be prevalent in the entire APAC region, maintaining an average rate that is 60% higher than the global average, with the financial exposure of fraud in the region exceeding $650 million in six months.
  2. Finance and Shopping apps are the most affected, with Finance apps having the highest targeted ad fraud victims in the region at 48.1%, followed by Shopping apps and Travel apps respectively, at 32.2% and 29.7%, in line with the region’s growing consumer prosperity. This is due to higher payouts and scale of user base, compared to the highly sophisticated anti-fraud protection often used by gaming marketers.
  3. The use of bots and install hijacking remain the most common attacks. They have been tackled with real-time, adaptive anti-fraud solutions, while click flooding is on the decline.

To access the full version of the latest AppsFlyer APAC Ad Fraud Report, please visit here.

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