Marketers lose $100 million to mobile app advertising fraud

Mobile tablet advertising

App marketers will lose up to $100 million in 2016 due to mobile app install and engagement advertising fraud according to a new study.

The research from mobile analytics company AppsFlyer shows that the losses come from fraudulent click data, paid installs from fraudulent devices, and fraudulent and simulated in-app events.

While the study found the US to be the region most targeted by fraudsters, the countries with the highest rates of app install and engagement ad fraud -- when taking account mobile population -- are, Germany, Australia, China, Canada and the UK, followed by the US, Russia and France. The research shows that fraudsters attempt to target specific countries depending on the potential payout they can get from falsifying their location to commit fraud. Countries with the highest cost-per-install and cost-per-action payouts have a higher fraud rate, while regions with relatively low payouts -- including Indonesia, India, Brazil, Vietnam and Thailand -- have a lower fraud rate.

While roughly 50 percent more fraud is perpetrated on Android, iOS is not immune and is often targeted heavily since, if successful, payouts tend to be far higher on iOS for those perpetuating app install and engagement fraud.

To help combat this fraud, AppsFlyer is launching DeviceRank, a new anti-fraud technology that works like a credit score, identifying questionable behavior and offering enhanced protection. It uses a big data-powered algorithm to build an anonymized, multidimensional rating of every mobile device. Each device is rated on a scale from C (fraudulent), through B, A, AA and AAA. Devices with a C rating are automatically excluded from AppsFlyer's attributed installs and analytics.

"As we've seen from our global study, fraudsters and scammers are growing increasingly sophisticated, tricking advertisers into paying for both installs and in-app engagement," says Oren Kaniel, co-founder and CEO of AppsFlyer. "DeviceRank takes a radically different approach, cutting off fraud at the source and adding transparency to our industry in order to protect advertisers, our partners and the entire market. AppsFlyer is in a unique position to apply this game-changing technology and leverage our scale across the mobile industry, arming marketers worldwide with the best solution to combat fraud. We are excited to add DeviceRank to the AppsFlyer Active Fraud Suite, as we remain committed to fighting fraud and helping cleanse the app ecosystem of this problem".

You can download the full survey report and also discover more about DeviceRank on the AppsFlyer website.

Image Credit: Denphumi / Shutterstock

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