Meanwhile, mobile ad fraud in South-east Asia has halved, according to an annual global study.

Finance apps are the most exposed verticals to fraud. Due to increasing investments in marketing activity, Asia-Pacific markets are responsible for approximately 60% of the financial exposure worldwide, at US$945 million.

Globally, “App Install Ad Fraud” has dropped by approximately 30% to US$1.6 billion compared to H1 2019. These are some of the findings in the latest annual report on Mobile Ad Fraud by market analytics firm AppsFlyer.

As most mobile advertisers are increasingly aware of the dangers of app install fraud, fraud protection solutions are now stronger than ever. The 2020 APAC report examines 3.8 billion installs across 55,000 apps in the Entertainment, Finance, Gaming, Shopping, Social, and Travel verticals.

Regional findings

South-east Asia has experienced an improvement in fraud levels, as noted in the report. Within the region, Singapore’s overall fraud rate in the Entertainment vertical saw an increase from 54% in July 2019, to 59% in May 2020—the highest fraud rate in the region—with Indonesia at 23.5% and Vietnam at 18.6% in May 2020.

Despite this, verticals such as Entertainment, Casual games, Midcore games, and shopping saw drops in fraud levels across the regions in APAC due to COVID-19 lockdowns. 

Ronen Mense, Managing Director and President, AppsFlyer (APAC), said: “Despite a general downtrend of ad fraud in Southeast Asia due to the market’s heightened awareness; Indonesia, Singapore and Vietnam saw a peak of ad fraud in March 2020. This is because COVID-19 forced many countries to implement strict lockdowns. With more people staying at home, the demand for mobile apps increased, leading to aggressive user acquisition activities. This saw a large number of fraudsters drawn towards this activity, which was notably unsuccessful, as seen in a drop of fraud levels in the following months. Indonesia experienced a 28% rate of fraud in March 2020, which dropped to 19% by May 2020, while Singapore levels declined from 35% in March 2020 to 20% in May 2020.”

In a previous report, AppsFlyer had showed that South-east Asian countries saw a spike in App activity when many countries enforced strict lockdowns. The report showcased a drop in total revenue for shopping apps in Indonesia at 8.05% in May 2020 to 4.67% in June 2020, as the demand for online shopping decreased after strict lockdowns in many countries eased.

Finance apps most prone to Fraud

Appflyer’s report shows there are exceptionally high fraud rates in the Finance vertical in South-east Asia, with four out of five markets exceeding 50%; fraudsters are attracted to this vertical because of the monetary nature of these apps, with significant scale and higher payouts.

Vietnam is currently experiencing the highest level of fraud levels in the Finance vertical, seeing a fluctuation in rates, with a growth to 64% by May 2020, in comparison to 62.3% in July 2019. Indonesia saw finance fraud rates fluctuate between 2019 and 2020. In July 2019, fraud rates were 55.9% but dropped to 38.2% by October 2019. These fraud rates seem to have risen by April 2020 to 63.3%, but by May have had declined to 61.2%. 

Conversely, relatively low fraud rates are seen among gaming genres globally. Nevertheless, Hardcore Gaming and Social Casino games in some APAC regions paint a different picture—especially with fraud rates in South Korea at 44% for Hardcore Gaming and 61% for Social Casino gaming (yearly averages), and in Vietnam with 30% in Hardcore Games and a massive 10x leap in Social Casino games between March to April 2020.

In Singapore, fraud in the Hardcore Gaming genre had dropped drastically from 50.8% in July 2019 to 4.6% in May 2020. 

Android and IOS analytics

This year’s report shows that Android devices dominate worldwide in terms of market share, making Android the platform of choice for fraudsters.

The App Install fraud rate on Android is over 4.5 times higher than it is on iOS, perhaps because iOS apps are subject to stricter vetting processes and reach out to a smaller user base.

Meanwhile, the APAC region has seen higher percentages of flooding attacks, which is a combination of bots and automation tools.

Notably, fraudsters have been setting their sights beyond Cost-Per-Install to include Cost-Per-Action rewards. Cost-Per-Action (CPA) models play a part in fraud protection due to their deeper funnel activity making them harder to hijack in comparison to Cost Per Install (CPI) models.