APAC exposed to US$650 million worth of app fraud in six months

Asia-Pacific was exposed to US$650 million worth of app install fraud over a six-month period to April this year, with an average fraud rate that is 60% higher than the global average, according to AppsFlyer.

The vast sum is how much marketers would be out of pocket had they been left without fraud protection, the company claims in its APAC Ad Fraud Report 2019.

The mobile attribution and data analytics company examined 2.5 billion installs across 8,000 apps in entertainment, finance, gaming, shopping, travel and utilities, covering activity between November 2018 to April 2019.

It identified Southeast Asia as a key target for fraudsters, with over US$260 million at risk—accounting for 40% of the total estimated ad fraud losses in APAC.

This is due to high mobile penetration rates, increasing connectivity quality, and rapid integration of e-payment methods across the region, making it a highly lucrative target for fraudsters, the company said.

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, it added.

India’s financial exposure of US$186 million is the second highest in the region.

Vietnam saw the only extreme peak rates during the time period, jumping from a fraud rate of 35% to 50% between November and December 2018.

Finance and shopping apps were identified as the most affected by fraud across APAC.

Finance apps had an average 48.1% fraud rate over the time period, followed by shopping apps and travel apps at 32.2% and 29.7%, respectively.

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.

Overall, the APAC region experienced an average fraud rate of approximately 25% (25 out of every 100 non-organic installs was fraudulent), which is 60% higher than the global average.

Conversely, DoubleVerify’s 2019 Global Insights Report, released last week, found that the APAC region saw one of the lowest overall fraud rates globally (1.6% compared to 2.7% for LATAM and 3.3% for North America) for the period of May 2018 to April 2019.

“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," said AppsFlyer APAC marketing director Beverly Chen. "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.”