More than 5% of app installs from non-premium ad networks are fake, according to a study by DataVisor provided to Mobile Marketer. The fraudulent ads cost mobile marketers as much as $300 million per year in lost ad spend, the online fraud and financial crime detection service said.
Active user campaigns, seen as safer than per-install campaigns, aren't immune either. Bad actors in the space have learned to better mimic the behaviors of real people performing in-app events: more than 84% of fraudulent installs generated at least one in-app event after downloading, according to the findings.
The extent of fraud varies widely. Some networks have upwards of 90% fraud rates for individual campaigns, making ad networks that work well for one campaign not necessarily a good option for others. And the issue persists globally, with the U.S. among the countries with some of the highest fraud rates.
Ad fraud remains a persistent issue for the industry, and it's now hitting mobile devices pointedly as the channel is seeing a great deal more spend. What should be alarming for marketers isn't the presence of app install fraud itself — that's existed since the format was introduced — but the growing level of sophistication, where bad actors can more accurately replicate the real deal. Outside of siphoning off brands' ad dollars, the presence of fraud, on mobile and elsewhere, can degrade trust with consumers.
On a brighter note, there does appear to have been some progress made this year in fighting ad fraud overall. In May, the Association of National Advertisers (ANA) found a 10% decrease in global financial losses due to bot fraud specifically compared with 2016, and declared the war "winnable." ANA estimates that economic losses from ad fraud globally will hit $6.5 billion this year, down from $7.2 billion in 2016.
However, despite the modest drop, the ANA urges advertisers to take precautions such as demanding transparency on traffic sources, refusing payments for non-human traffic in media contracts and working with accredited third-party fraud detection companies — guidance that can extend to monitoring app install campaigns as well.