AppsFlyer has released The State of Mobile Ad Fraud 2020 and, suffices it to say, it’s not a pretty picture for the Asia-Pacific, with the region accounting for around 60% of the financial exposure worldwide, at US$945 million, due to increasing investment in marketing activity.
The 2020 APAC report data is based on an examination of 3.8 billion installs across 55,000 apps in the Entertainment, Finance, Gaming, Shopping, Social, and Travel verticals. And despite the dangers of app install fraud, fraud protection solutions now being “stronger than ever,” fraud is still a pressing concern across the region.
By comparison, globally, App Install Ad Fraud has dropped by approximately 30% to US$1.6 billion compared to H1 2019.
“Despite a general downtrend of ad fraud in Southeast Asia, due to the market’s heightened awareness; Indonesia, Singapore and Vietnam saw a peak of ad fraud in March 2020,” said Ronen Mense, Managing Director and President of AppsFlyer APAC. “This is because COVID-19 forced many countries to implement strict lockdowns. With more people staying at home, the demand for mobile apps increased, leading to aggressive user acquisition activities.”
In short, the buffet table is open and well-stocked.
“This saw a large number of fraudsters be drawn towards this activity, which was notably unsuccessful as seen in a drop of fraud levels in the following months. Indonesia experienced a 28% rate of fraud in March 2020, which dropped to 19% by May 2020, while Singapore levels declined from 35% in March 2020 to 20% in May 2020.”
Relatively low fraud rates are seen among gaming genres globally. However, Hardcore and Social Casino games in some APAC regions paint a different picture.
Within the Southeast Asia region, Singapore’s overall fraud rate in the Entertainment vertical has seen an increase from 54% in July 2019, to 59% in May 2020 — the highest fraud rate in the region — with Indonesia at 23.5% and Vietnam at 18.6% in May 2020.
Despite this, verticals such as Entertainment, Casual games, Midcore games, and shopping saw drops in fraud levels across the regions in APAC due to COVID-19 lockdowns.
A previous report, AppsFlyer’s The Coronavirus (COVID-19) Impact on App Installs and Marketing Budgets, showed that Southeast Asian countries saw a spike in App activity when many countries enforced strict lockdowns.
The report showcases a drop in total revenue for Shopping apps in Indonesia at 8.05% in May 2020 to 4.67% in June 2020, as the demand for online shopping decreased after strict lockdowns in many countries ended.
Finance apps most prone to Fraud; gaming low in general
The State of Mobile Ad Fraud 2020 also showed that there are exceptionally high fraud rates in the Finance vertical in Southeast Asia, with 4 out of 5 markets exceeding 50%; fraudsters are attracted to this vertical because of the monetary nature of these apps, with significant scale and higher payouts.
App install fraud rate on Android is over 4.5 times higher than it is on iOS, because iOS apps are better protected from fraudulent activity, due to its stricter vetting processes.
Vietnam is currently experiencing the highest level of fraud levels in the Finance vertical, seeing a fluctuation in rates, with a growth to 64% by May 2020, in comparison to 62.3% in July 2019. Indonesia on the other hand, saw finance fraud rates fluctuate between 2019 and 2020.
In July 2019, fraud rates were 55.9% but dropped to 38.2% by October 2019. These fraud rates seem to have risen by April 2020 to 63.3%, but by May of the same year started to decline to 61.2%.
Relatively low fraud rates are seen among gaming genres globally. However, Hardcore and Social Casino games in some APAC regions paint a different picture — especially with fraud rates in South Korea at 44% for Hardcore gaming and 61% for Social Casino gaming (yearly averages), and in Vietnam with 30% in Hardcore games and a massive 10x leap in Social Casino games between March to April 2020. In Singapore, fraud in the Hardcore gaming genre dropped drastically from 50.8% in July 2019 to 4.6% in May 2020.
Other insights from the report
- Android devices dominate worldwide in terms of market share, making it the platform of choice for fraudsters.
- App install fraud rate on Android is over 4.5 times higher than it is on iOS, because iOS apps are better protected from fraudulent activity, due to its stricter vetting processes.
- APAC has seen higher percentages of flooding attacks, which is a combination of bots and automation tools.
- Cost-Per-Action (CPA) models play a part in fraud protection due to its deeper funnel activity making it harder to hijack in comparison to Cost Per Install (CPI) models leading to fraudsters setting their sights beyond CPI to include CPA rewards.