Amid Coronavirus, Are the Fraudsters Also Staying Home?

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The effects of Covid-19 are far-reaching and global. As lockdowns around the world continue, we are only beginning to come to grips with some of the earliest consequences. 

For the app economy, digital ad spend is down by a third, but organic installs are rising. All the while, CPMs drop. One question remains: Has ad fraud been affected, too?

To date, the app industry has said little about the effects of coronavirus on fraud. With self-isolation enforced globally, and workers now adapting to the new world of working from home, we investigated whether the rate of ad fraud (and by proxy, the output of fraudsters) had been disrupted. Or are fraudsters themselves in the line of fire as they continue to operate both above the law and in close proximity with each other?

A fraudster’s work is never done

Recent research conducted by Adjust’s fraud team has uncovered an increase in fraudulent activity since the beginning of 2020, with activity peaking throughout March as Covid-19 forced much of the world indoors. Adjust recorded a 16% month-on-month increase in fraudulent installs, with three peaks in activity trending an average 36% above February’s activity. 

We believe this is likely due to fraudsters filling the demand. With an overall decrease in installs and sessions across a number of app categories, including travel and ecommerce, there is now less supply than usual. This would ordinarily increase CPMs — but, to keep them low, unscrupulous publishers are instead selling fraudulent traffic, thereby maintaining cheaper prices. In fact, Adjust sees a rise in fraud overall, blocking a much higher number of fake installs than in a typical month.

A rise in fraud has been seen cross-industry. CEO Matt Gillis has noted that “The market forces of lower ad prices and extraordinarily high traffic have basically brought the rats out of the sewers,” identifying the drive-down in ad costs as a factor at play. It’s clear that fraudsters are continuing to work through the pandemic and are finding more opportunities to conduct their activities than in steadier times. What, if anything, can an app marketer do to avoid fraud?

Reconsider your sources

Only the paranoid survive, so the phrase goes. But when it comes to auditing buying sources, no advice could be better. Whatever publisher or network you buy from, you must look at the numbers to try to understand if they make sense. As Adjust pointed out two years ago, “The real fix is to realize that you need to pay attention to what’s happening from the first impression all the way through to the hundreds of events that happen after the install. There’s just no substitute for that.”

An important part of solving the challenge is to analyze KPIs all along the user funnel and look for anomalies, including click rates, conversion rates, store discrepancies, and other figures that  seem too good to be true. Benchmark between favored sources to understand your baseline, and test, test, test.

Other signs of potentially fraudulent behavior happen even before you’ve paid. For instance, some networks may refuse to send over impression information alongside click data. By tying the two data points together, marketers are able to check whether a matching engagement was made by the same device. If a network withholds such information, you need to know why. 

There are always new exploits in development by fraudsters, even during a pandemic. Yet that doesn’t mean the underlying systems vary. Understanding the limitations within which fraudsters operate and continuing to stay in the know on the current fraud climate remain some of the best defenses against fraud itself. Question your sources, question your vendors, and question your data whenever possible.

Fraudsters are still an active, and even growing, threat. Continued vigilance against fraud during the Covid-19 pandemic is a must for marketers.

Andreas Naumann is director of fraud prevention at Adjust.