Installation frauds of e-commerce apps accounted for half the total downloads during the Indian festive season, traditionally from October with the start of Dussehra, according to a study by a global digital ad and fraud detection and protection company.
Such frauds may hit the business market because, besides fraudsters launching fake apps to make revenue from advertisers, it affects the evaluation and investment for a start-up.
The Indian-based company, mFilterlt, handles sites accounting for over 50 per cent of the country’s e-commerce customers, including top global players.
In October, the share of app installation frauds, done through automated tools but are never opened for use, hit 51 percent of the total downloads, while the average between April and November was 47 per cent.
Frauds in which apps are used to add and remove items from cart, albeit with no transaction, accounted for 63 per cent of the total downloads in October as opposed to the 56 per cent average, the company stated, according to a report by the Business Standard.
The number of app downloads is a significant factor for a start-up to get investments and capital, the publication stated.
Experts said that established e-commerce players spend a major portion of their budget to increase advertisiting and sales budgets for performance marketing during the peak sale season, all of which goes to waste due to installation frauds.
Amit Relan, Co-Founder and Director of mFilterIt, told the publication that during the festive season, a brand has a short serviceable window where almost 45 per cent of its advertisement budgets are deployed to gain more than 50 per cent of the yearly sales, adding that this leaves no room for correction.
“Brands need to strike a balance between optimisation of ad spends and brand protection to insulate themselves from the bad actions plaguing the digital ecosystem,” Relan told the publication.
The company stated that such advertising frauds are not limited to apps. According to the report, as much as 12-13 per cent of the digital advertisement spend in the country (estimated at Rs 28,000 crore) in 2021 will go to waste because they are generated by BOTs, domain spoofing, and click injections.
Domain spoofing is a cyber fraud methodology that can make advertisers pay more to put up ads on spoofed websites, while click injections use malware to generate clicks to advertisements.
The report stated that this year, 15 per cent of the total digital advertisement revenue was wasted, while social media accounts for 29 per cent of the total.
However, the report noted that the wastage of money due to ad frauds for online video channels, which account for 28 per cent of the total digital ad revenue, was much lower at 10 per cent. Also, in the case of paid search engines, which have superior controls, the fraud rate was at 6 per cent.
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