Lawsuits are not a tool to solve ad fraud, it is a last resort, says Appsflyer Asia vice president

Ronen Mense, VP of Asia at AppsFlyer explains how fraudsters are resetting device IDs and why lawsuits will not solve fraud

The fight against advertising and mobile fraud has intensified in recent times with ride-sharing giant Uber taking its mobile agency Fetch Media to court to answer allegations of fraud, but fraudsters are showing no sign of stopping, according to AppsFlyer.

The adtech company recently discovered that fraudsters are utilising real clicks on real advertisements to create real installs and engagement from real devices, all of which are perpetrated in phone farms.

The process involves resetting the device IDs in between each application install on a massive scale which, in turn, makes each phone in a device farm appear “new” even after thousands of repeated app installs. This results in the generation of a large amount of fraudulent traffic which bypasses all other anti-fraud technologies to appear as legitimate app install activity.

Speaking to The Drum, Ronen Mense, vice president of Asia at Appsflyer explains that this new type of fraud is extremely detrimental for brands and marketers because, even though the app install and engagement activity appears to be real, none of it has any actual value to advertisers or the apps’ growth. It also accounts for more than half of mobile app install fraud (51% globally) and will cost advertisers an estimated loss of $1.1-$1.3bn in 2017 globally.

“Marketers typically look at click patterns and install validation to detect fraud, but by ignoring device-based fraud, they remain exposed to over half of mobile app install fraud,” he says. “With DeviceID reset fraud included, nearly 10% of all non-organic installs are fraud. This means that out of every dollar spent on mobile advertising, 10 cents goes directly out of your budget and into the pockets of fraudsters. In total, advertisers will lose a staggering $2.2-$2.6bn to app install fraud in 2017.”

According to the executive, the top two app categories globally that are the most affected from this method of fraud are tools and utilities in Android and Entertainment in both iOS and Android, and that nearly 20% of apps in each of these categories are afflicted with at least 20% device ID reset fraud.

“Marketers and developers from these mobile app categories often boast very aggressive growth strategies,” he explains. “They also put in exuberant and sometimes irrational investments in user acquisition campaigns aimed at rapid expansion - no matter the cost mean quantity often comes at the expense of quality. This leads to significant funds being wasted on fraudulent installs.”

“Finance, games and shopping also rank among the top five categories that are affected by this fraud,” adds Mense.

While Appsflyer has yet to find any particular trends relating to time of day or day of week of device IDs getting reset, it has introduced a new offering called Protect360 to help protect advertisers against the cost and loss of mobile install fraud.

It will also focus on working closely with impacted network and customers on several fronts to address fraud issues uncovered by the insights that the company provide, says Mense, from transparent fraud reporting to fraud postbacks. “We will also continue to evolve our offering to combat fraudsters’ efforts and are ready to do what is necessary and prudent to protect marketers from networks who demonstrate that they do not have the best interests of our clients at heart.”

As companies like Appsflyer continue to fight against fraud, Mense is encouraged by the fact that brands are also starting to pay attention to the problem and become proactive, explaining that the Uber-Fetch lawsuit case is a good wake-up call to the scope of fraud happening on mobile advertising.

However, he asserts that lawsuits are not a tool to solve fraud as lawsuits are always a last resort when two companies cannot find resolution to a conflict. He said it was important to note that fraud not only has a negative impact on the advertisers, but also the networks and publishers because it diminishes the value of the products that they are selling.

What marketers should do instead, Mense stresses, is to address mobile ad fraud by informing advertising networks and publishers about their criteria, and setting clear rules on what they will and will not pay for. He added that there must be a clear message that there is zero tolerance for questionable clicks and user acquisition methods.

Another option is to have the tools to catch fraud during campaign, he continues, like having alerts and certain KPIs set during campaigns so that marketers are immediately alerted if these are breached.

“The industry needs to band together, with everyone working towards greater transparency to improve protection for all. Only with greater protection for marketers will there be a deterrence,” Mense says.

Shawn Lim

Shawn Lim is a reporter at The Drum, covering industry news around the Asia Pacific region with a focus on Singapore and Southeast Asia. Based in Singapore, he has worked across photography, video and online, covering a range of subjects including current affairs and sports.

Before Game of Thrones, he was a huge Breaking Bad fan. He does CrossFit and yoga to stay healthy.

All by Shawn