Mobile tracking and marketing firm AppsFlyer announced today its Protect360 platform to help mobile advertisers deal with the cost of mobile ad fraud.

AppsFlyer believes that a common form of fraud — DeviceID reset fraud — cost advertisers $1.1 billion to $1.3 billion in the past year, and it accounts for more than 50 percent of all app installation fraud. In this fraud, the scammers create a fake phone identification, install an app, and then enable an ad network or other provider to collect a fee from an advertiser who pays for installations of apps.

This type of fraud shows that the growth of mobile marketing is attracting criminals who want a piece of the pie. The fraud is perpetrated by “device farms,” which contain thousands of mobile devices conducting ad fraud. The farms use a number of techniques to mask their activity, such as continually resetting the identification numbers, or DeviceIDs, of each mobile phone. This makes each phone in a device farm appear to be new, even after thousands of repeated app installations.

AppsFlyer found that 16 of the top 100 ad networks had considerable fraud, where AppsFlyer estimated that more than 20 percent of the overall installs were coming from DeviceID reset fraud. The company is able to do this kind of tracking thanks to its mobile attribution business, where it wades through huge data sets to figure out which ad causes someone to take action on an offer or an install pitch.

“Only a company like AppsFlyer that couples big data and machine learning to detect anomalies across 98 percent of active mobile devices today could uncover the extent of a scheme like Device ID reset fraud,” said Oren Kaniel, CEO of AppsFlyer, in a statement. “Protect360 is a turning point and the latest such innovation that actively ensures integrated networks can go one step further when it comes to protecting our clients, building on the intelligence services like our DeviceRank database offer to the ecosystem.”

Above: AppsFlyer delves into how much ad fraud it finds via region.

Image Credit: AppsFlyer

Protect360 uses multiple layers of anti-fraud technologies and tools for near real-time protection. It blocks fraudulent installs and flags evolving suspicious behaviors and anomalous activities.

In addition to preventing DeviceID reset fraud at the SiteID level and recognizing fraudulent devices, it also shields users from other types of app install fraud, including, but not limited to, install hijacking, click flooding, and man-in- the-middle attacks. Real-time postbacks keep network partners in the loop, minimizing the need for reconciliation negotiations between advertisers and publishers.

AppsFlyer provides detailed fraud savings reporting to help marketers determine when and where fraud has been blocked, so they can take proactive measures with network partners as needed.

“AppsFlyer protects its clients in two important ways: via data-driven machine learning and continuous regulation of AppsFlyer’s ecosystem of network partners,” said Kaniel. “Given our significant market share, we have access to huge amounts of data that allows us to constantly train our fraud detection algorithms and block more, faster. Thanks to Protect360, networks and publishers are extremely careful when it comes to our clients’ traffic.”

AppsFlyer said its mobile attribution and marketing analytics technology is on 98 percent of the world’s smartphones. It has 2,500 partners among app publishers and platforms, and works with 12,000 brands.

Shani Rosenfelder, head of mobile insights at AppsFlyer, said in an email that the company calculated the amount of money lost just to DeviceID reset fraud.

“We multiplied the average weighted cost per install globally (based on 50 million installs with cost data from over 100 networks), by the number of fraudulent installs,” he wrote.

To reach an overall market figure, AppsFlyer considered its market share (based on published third-party market share analyses of mobile attribution providers) and made an estimate for the entire app marketing ecosystem, he wrote.

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