Southeast Asia a 'highly lucrative' target for mobile ad fraud, says AppsFlyer

Southeast Asia is a key target for fraudsters, with more than US$260 million at stake, due to its high mobile penetration rates, increasing connectivity quality and rapid integration of e-payment methods. According to AppsFlyer's latest APAC Ad Fraud Report 2019, this makes the region a "highly lucrative" target for fraudsters due to the sheer size of users and high payouts the markets within produce.

This is further compounded by lower resources for app developers, the prevalence of fraudulent traffic in local networks and high marketer demand for volume, the reported added. Finance (48.1%) and shopping (32.2%) apps are the most affected, followed by travel apps (29.7%), in line with the region's growing consumer prosperity.

Finance apps overall hold the highest rates across categories, climbing over two times higher than other verticals, on average, in Indonesia, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam. However, this high streak did not hold true in Japan, where rates dropped to around 3% on average after November 2018. Likewise, gaming apps had consistently lowest fraud rates during the time period, staying largely on or below 10% except in South Korea, where it often exceeded 20%.

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Attacks have primarily been carried out through bots and install hijacking, with click flooding and device farms still being a method that is in use but at a much lower rate. With a large number of mobile users in Southeast Asia, device farms are deemed as being not as effective as compared to software hacks. 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.

Also, the scale of the issue seems to be under-reported, as marketers in the region move towards a cost per action business model to measure app effectiveness instead of a cost per install model, with the infiltration and the sophisticated nature of ad fraud today, fraudsters have managed to infiltrate into the app itself making it harder to track.

According to AppsFlyer, fraud attacks by bots most consistently affect the APAC region. Out of all verticals, travel apps have the most even distribution between all four fraud types across most countries, except a particularly strong presence of bot attacks in Indonesia and India averaging around 60%.

Following close behind Southeast Asia is India, with US$186 million at risk when it comes to ad fraud. Meanwhile, AppsFlyer added that had Asia Pacific marketers been left without protection over the last six months, they would lose US$650 million.

AppsFlyer's APAC marketing director Beverly Chen said 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," Chen added.

(Photo courtesy: 123RF)