When a business opportunity evolves at the speed of the mobile app market, you can bet it’s going to attract the attention of a number of undesirable characters who wish to game the system. Fraud has always been a problem in online marketing circles (particularly when it comes to incentivized schemes such as affiliate programs and advertising networks which reward publishers on a CPC, CPA or CPM basis) and the mobile app marketing space is no different. The sheer scale and speed of development of the ecosystem and the truly global nature of the industry means that fraud is often an inevitable and potentially lucrative opportunity for a new and emerging breed of highly sophisticated cyber fraudsters.
The very nature of fraud in the mobile app marketing arena makes it incredibly difficult to detect and therefore it has the potential to silently steal vast sums of revenue from app developers’ marketing budgets. Some developers may even be actively encouraging fraudsters because they misjudge their activities as successful engagements.
A Big Problem
Fraudulent click and attribution strategies are set to cost the industry a staggering $16.4 billion in 2017 (an increase of more than $10 billion on the previous year). While this headline figure might be a little bewildering to the average app developer or marketer, they will definitely understand the impact that fraud has on their own marketing budgets and their understanding of acquisition costs, return-on-investment and customer lifetime value. When fraud muddies the water of any marketing strategy – things just don’t look right or add up correctly.
How Do Fraudsters Exploit App Developers?
Before we tackle the problem of fraud relating to mobile app marketing, we first need to understand who the fraudsters are and the various strategies they adopt.
A Victimless Activity?
To anyone outside of the industry, mobile app marketing fraud may appear to be a victimless offense. Perpetuated by increasingly sophisticated fraudsters, it doesn’t impact on the end-user (who is rarely aware they have been party to a fraudulent activity) and “only” steals money which would have been allocated towards the marketing of a product. Because of this, it often goes unnoticed or is even grudgingly accepted as an inevitable cost. Aside the damage fraudulent activity does to the profit margins (many of which are wafer thin) of numerous app developers who create opportunities for their employees and the communities in which they live and work, the funds from fraudulent activities are often used to fund more extreme (often criminal) activities. With this in mind, fraud is never victimless.
A Global Threat
While most fraudulent activities relating to the mobile app space are perpetuated in emerging economies, with countries like India and Indonesia accounting for 31 and 21 percent of activities respectively, more mature markets with highly developed app ecosystems, including the United Kingdom and the United States, also currently report fraud levels above 10 percent.
Consider This: Can you afford to give away 10%+ of your marketing budget to fraudsters?
But fraud isn’t limited to “local” marketplaces. Thanks to the global nature of app ecosystem – fraud does not recognize geographic boundaries.
Incentivized Marketing Channels
Fraudulent activities tend to target incentivized marketing channels by inflating the numbers of clicks a specific campaign receives or creating fake app downloads and/or activations. These activities falsely attribute campaign success to the fraudsters’ underhand methods, meaning app developers are paying out for non-legit engagement and fake activations.
Tricks of the Illicit Trade
Some of the most common approaches to mobile app fraud include:
Fraudsters automatically redirect browsers from malicious mobile sites or applications to a specific page on an app store without requiring the users to first click on a link or an advertisement. If the user later decides to download and activate the app, the fraudster is attributed with the engagement.
A similar approach to the aforementioned Automatic Redirection scam but on a greater scale. The fraudster stacks multiple links to multiple apps together which are then activated by a single click. Again if the user then later decides to download and activate an app included on the stack and fraudulently tagged, the fraudster is credited with the initial attribution.
Click stuffing simply tags a user’s device when they visit a malicious website without the need to visit a specific page on an app store, resulting in the fraudster claiming attribution if and when an app is later downloaded and activated.
Click Injection is a highly sophisticated method of claiming attribution from the “organic” discovery process which should be free. User activities are monitored and tracking tags automatically “injected” via a piece of malicious software (often disguised as a useful app) when the user downloads a new app, crediting the fraudster for the referral.
Emulators and Bots
Who needs human engagement when you can fake it with a bot or emulator? This incredibly sophisticated method of fraud is constantly being developed to mimic human behaviour even after an app is activated, making detection even harder. For campaigns with high referral premiums, some fraudsters have even been known to develop bots that even purchase products or services from apps to fool developers into thinking they are real people.
Make no mistake: Mobile App fraud is conducted on an industrial scale and the parties involved are incredibly smart operators with highly sophisticated methods. Underestimate them at your peril.
Taking the Fight Back Against the Fraudsters
Security is obviously a big concern for many app developers and large publishers will invest significant sums of money and resource into tracking and tackling fraud.
However, spotting fraud isn’t easy.
App security teams will employ a number of strategies to reduce the risk of fraud including IP filtering and blocking, monitoring and analysing data to identify unusual activities, and tracking user behaviour following an app’s activation. However, none of these measures are infallible and an over-zealous approach can lead to app developers punishing legitimate (and potentially lucrative) referral partners.
Due to the scale of the problem and difficulties in tackling it, successfully policing mobile app marketing fraud is rarely an option for many app developers. This will be especially true for organizations with limited resources or where app development is just one route to market and not their primary function. Instead, they need to look to more secure routes to market to ensure a more honest and reliable understanding of success.
Pre-Loading – A More Secure Route to Market
Pre-loading apps on new devices with Digital Turbine offers app developers a more secure route to market where fraud is much less prevalent.
Digital Turbine partners directly with mobile operators (across global markets) with strict testing and quality assurance parameters. This means a preloaded app will be fully vetted by the carrier prior to approval to ensure that it does not include any stealth technologies which contribute to fraudulent activities.
As an additional level of security, prior to Digital Turbine presenting an app to a mobile operator for pre-loading, it must first also pass our own rigorous testing program. Every preloaded app we deliver carries our reputation with it and as such, must conform to the highest standards and maintain the integrity we expect in the app ecosystem.
Because Digital Turbine’s preloads only go to new devices we are able to match International Mobile Equipment Identity (IMEI) codes – a unique identification number given to all smartphones – to individual activations, meaning you only pay for legitimate engagements which we recognize.
As leading technologists in the mobile app arena Digital Turbine are also pioneering advanced algorithms which help us monitor and track performance, highlighting potentially fraudulent activities before they impact on the app developers’ bottom line. Because our business relies on a transparent, fair and legal environment to operate in successfully – developing these tools is very much a priority.
A Clean and Trusted Environment
Preloading offers app developers a clean and trusted environment to deliver their apps with the added benefits of greater targeting, improved discoverability, higher rates of activation and engagement.
Speak to Digital Turbine about Avoiding Fraud
Are you concerned that fraud is impacting on the success of your mobile app marketing and engagement strategies? Are you paying for fake engagements and activations? Do you trust the ecosystem you operate in 100%?
Isn’t time you spoke to an advisor at Digital Turbine to help you build a more transparent and secure route to market for your mobile apps?