- Adjust, an app business intelligence company, looked at 400 million app installs and found that between 1.35% and 5.55% were fraudulent.
- For marketers this means some measure of advertising dollars spent on app install ads is wasted on false conversions.
- Adjust is taking a proactive stance against app fraud with its newly-released Fraud Prevention Suite that includes three components that check out IP traffic and verify purchases.
Last summer fraud detection firm Forensiq ran a study on 12 million devices and found app fraud to be an $857 million dollar annual problem, and since that study came out, the estimate has risen to closer to $1 billion. The issue is significant because marketers are increasingly taking advantage of app install ad formats, as well as marketing via apps.
Something to note, Venture Beat pointed out, is that "the percentage of ad fraud traffic is heavily skewed between different types of paid traffic, depending on whether it is coming from Facebook, Twitter, and Instagram, which are less susceptible to fraud, or other sources." Meaning, if you're filtering for fraud outside of these platforms, the potential for fraud doubles.
"Fraud in this context refers to fake conversions, spoofed by illegitimate publishers looking to claim CPI payouts for traffic that never existed. Faked conversions isn’t just a financial liability, but also corrupts your dataset - skewing ROI calculations and shaking your trust in your optimization work," Simon Kendall, head of communications for Adjust, explained in a blog post.
An interesting element of Adjust’s tool is it includes attribution analytics so when bad traffic can’t be attributed to a source, advertisers don’t have to pay for the fraudulent conversions. Also, Adjust said it is the first tool of its kind that can work in real-time. One thing the Adjust research makes clear, marketers need to be aware that app fraud is an issue they can't ignore.