As we are all already in the new year, FraudScore decided to share our story for 2018 and provide a picture of what changes and trends have been present in the e-marketing industry, and particularly when it comes to fighting fraud.
2018 for the industry
According to WARC, in 2018 the budgets spent by companies on digital advertising have reached a number of almost $560 billion, and the forecasts say that this number shall increase at least by 13% by 2022.
Juniper Research has stated that mobile internet has proven to be the fastest growing ad medium in 2018.
Additionally, 75% of marketing budgets are spent on mobile advertising, and therefore we can understand how attractive these funds are for fraudsters.
It’s not a secret that the bigger the marketing budgets for advertising are, the more sophisticated fraudsters methods get.
Latest FraudScore statistics for 2018 show that an average of 22% across all international ad traffic (both mobile and web) is fraudulent.
If we take a deeper dive into geo regions, we’ll see that the numbers vary between Russia and CIS with almost 40% fraudulent traffic and 17.64% in the EU.
We know that these statistics might scare you, but the truth is bitter. Compared to 2017, the growth of losses that fraudsters have caused to marketers has reached $3.9 billion.
Along with the evolution of fraud, the industry has shifted to a new level of problem solving and recognition in 2018. We suppose that 2018 can be called “A year of education” in the aspect of fighting fraud.
More and more companies have recognized fraud-detection instruments as a vital part of business relations with their partners.
Just to compare - the number of Google search requests for “ad fraud monitoring”, “ad fraud detection” and “ad fraud prevention” has grown 5.4 times this year.
Marketers have become more eager to work with networks, affiliates and agencies who are open to fraud detection instruments and are ready to negotiate if fraud is detected.
As an example of the industry shift towards fraud awareness - just remember the latest action that Instagram took to ban fraudsters and increase guarantees for advertisers.
Or the whole Kochava-Google-Cheetah Mobile case when even Google took actions and made a public statement for companies who are using malicious SDKs warning them to restrain from ad fraud schemes.
Google also made a statement that in 2019 they will proceed towards improving the Google Play Referrer API to prevent such cases of attribution fraud.
Even governments have recognized ad fraud as a malicious activity that needs to be prevented and punished.
The latest case is when the US Government charged fraudsters with more than $26 million for fraud click advertising schemes.
WFA (World Federation of Advertisers) has issued a manifesto on improvements that should be made to the whole digital advertising industry. One of the main issues that WFA recognizes is the problem of ad fraud and the ways to stop it to reduce marketing budget losses.
FraudScore felt it too. First, our product has become a standard participant of business agreements between our clients and third parties.
More than 47% of our customers have added FraudScore as a mandatory side tool to business decisions and arbitrage. Transparency in fraud fight is vital for the development of the digital advertising industry.
Fraud Detection in 2018. FraudScore statistics.
At the end of 2017 we stated that attribution fraud was the most widespread fraud type on the market. Click-spamming and click-injection were the leading fraud tactics among 300,000,000 conversions we scored in 2017.
Our prediction for 2018 was that smart bots would take leading fraud-generating positions.
We can now say that 2018 has been a year of botnets.
Each time you check, there is more and more sophisticated malware. In a matter of days these bots are implanted in thousands of devices to exploit profitable ad campaigns.
FraudScore statistics estimate that in 2018 the growth of proxy fraud (one of the symptoms of bots) in mobile traffic increased by 1.5% compared to 2017.
The proxy fraud leaders are US and CA regions.
The SBWIRE report also states that the US is the world’s top region for bot fraud.
FraudScore uses 100+ different metrics to detect fraudulent and malicious activities for both mobile and web traffic.
To simplify the analysis we grouped the metrics into Fraud Reasons categories.
Fraud Reasons
Detected proxy
Violations identified by IP addresses together with other parameters: botnet IPs, adware IPs, false GEO, proxy networks etc.
Device Software Anomalies
Abnormal device distribution such as device models, browser versions or operating systems.
IP distribution anomalies
Multiple conversions from the same IP or IP subnet.
Suspicious attribution
Click spamming, cookie stuffing, click injection and other activities aimed at stealing organic conversions.
Datacenter IP
Traffic that originates from data centers or cloud platforms.
Device abnormalities
Device emulators, fake device user agents, abnormal IDFA/Android IDs or MAC addresses.
Bad source
Suspicious websites or traffic sources that differ from the declared source.
Speaking about fraud reasons, FraudScore statistics show that proxy fraud has been the most widespread fraud type in all conversions processed in 2018.
Operating system fraud and IP anomalies take the second and third places in the FraudScore fraud reasons rating for 2018.
Click spamming and click injection have decreased by 2.1% compared to 2017, but attribution fraud is still among the top four.
If we dig deeper, we will see that every region has a specific fraud distribution pattern.
To learn more about FraudScore fraud reasons follow the link or read our blog.
FraudScore 2018: Mobile traffic statistics
2018 was also marked as the year when an average user spent 32 full days on their mobile phone.
Android devices worldwide have outnumbered iPhones, and the mobile ad market has grown by 26.9% according to Business of Apps.
However, comparing mobile ad fraud statistics for 2017 and 2018, the numbers almost doubled.
Fraud reasons distribution for mobile traffic shows that OS fraud and proxy fraud were the top issues for fraud detection in 2018.
Country breakdown shows that proxy fraud is dominant in US, Russia and CIS, attribution fraud is still leading in India, fraudulent IPs are common in the Middle East, and OS fraud is widely detected in China.
FraudScore updates: new features and technologies
FraudScore is always working on the cutting edge of technologies. In 2018 we added more features to our core products to cover the entire advertising funnel.
FraudScore.Action
- 15 new patterns for CPA, CPI and CPL campaign analysis
- expanded fraud detection capabilities
Smart Reject
A new feature released in 2018 for real-time fraud prevention.
SmartReject allows near real-time conversion analysis. Fraudulent conversions are automatically rejected inside the marketing platform.
Benefits include:
- no manual rejection
- affiliates do not see fraudulent conversions
- instant fraud blocking
- direct integration with marketing platforms
In 2018 we also launched a new warehouse for post-install events, capable of handling large volumes of event data for analysis.
We are preparing the launch of our new FraudScore platform in Q1 2019, which will include:
- post-install events analysis
- unique statistics for analyzed offers
- benchmarking and fraud analytics tools
- new fraud detection algorithms
- additional platform capabilities
More to come
We believe that 2019 will be even more intense and productive for FraudScore — new solutions, launches, countries and partnerships.
We asked our CEO Dmitry Isakov to share his opinion on 2018 and expectations for 2019:
“FraudScore is always on the frontlines of fighting fraud.
In 2018 we managed to reach all our goals — improve fraud detection efficiency, broaden prevention capabilities and release SmartReject.In 2019 we will launch our new platform, develop new partnerships and continue improving services for FraudScore clients.
Fraudsters create chaos in marketing budgets — and we are here to clean it up.”