In the UAE, travel, finance, and shopping were worst hit by mobile app install fraud while gaming demonstrated impressive resilience.
AppsFlyer released the latest edition of its State of Mobile App Fraud report, which found that in H2 2022, mobile app fraud on iOS climbed 40% while Android jumped 46% over H1 2022. Globally, mobile app install fraud exposure (the estimated financial value of fraud prevalent in the market - not actual damage or losses from fraudulent activity) increased a staggering 157% to reach $5.4 billion, with bots responsible for over 70% of fraud across all regions. In the Middle East and North Africa (MENA) specifically, the fraud exposure was $65 million.
“According to a study we did last year, 9 in 10 UAE businesses now offer dedicated mobile apps for their customers. In this crowded space, marketers are under pressure to drive up app installs via mobile ads. But given budgets are tight, several are experimenting with new media sources and channels that are often more susceptible to fraud. Ad networks, in addition, are also trying to increase profitability and they are taking riskier placements,” said Andreas Naumann, anti-fraud evangelist at AppsFlyer.
“For fraudsters, it is much cheaper and more scalable to concoct a fake user with a counterfeit device to perpetuate their fraud efforts, than using a method like running a device farm. The pandemic only fueled the fire, offering a fertile environment for fraudsters to scale up their mobile fraud schemes to take advantage of the remarkable surge in mobile device usage,” Naumann added.
The AppsFlyer research also revealed which sectors in the UAE are most susceptible to mobile app fraud. Travel companies saw the highest fraud rates of 71% and 58% on Android and iOS respectively. Given that finance apps are some of the most widely used in the region, unsurprisingly, finance followed with fraud rates of 61% and 64% on Android and iOS respectively. Shopping placed third with the fraud rate on iOS far outstripping that on Android at 40% compared to 23%.
Interestingly fraud rates were notably low (under 3%) for all categories of gaming apps, which despite being one of the most popular categories of mobile apps in the UAE, have managed to clamp down on losses due to fraud. “The gaming industry’s data-savviness and emphasis on post-install value optimization weeds out fraudulent activity. Mobile marketers across industries can draw valuable lessons from gaming pros,” Naumann said.
Digging a level deeper into the tactics that fraudsters in the MENA region are using, bots were the most commonly used, accounting for approximately 68% of fraud on both iOS and Android. Click flooding ranked second, accounting for 17% of iOS fraud and 13% of Android fraud. Fake publishing came in third with approximately 14% on both platforms. What is interesting is that Android also saw some cases of instal hijacking — that method accounted for approximately 4% of all fraud on Android.
Offering advice on how mobile marketers can navigate the challenge of optimizing their app marketing budgets while mitigating the threat of fraud, Naumann said, “I would advise marketers to keep their eyes focused on the quality KPIs of their campaigns and to make use of anti-fraud technology — every app should have an anti-fraud solution that fits its specific needs; if they don’t, they risk wasting significant portions of their budgets. When it comes to fraud, take nothing for granted. Staying aware and protected are key to not falling for the many fraud schemes established in the market.”
The 2023 edition of the AppsFlyer State of Mobile App Fraud report is available here.