By the end of 2023, ad fraud had cost marketers a staggering $88 billion worldwide, according to AppsFlyer. Predictably, this figure is expected to spike to $172 billion by 2028. With 15% of global mobile media expenditure wasted on fraudulent activities, the fintech sector finds itself uniquely vulnerable. This article ventures into how ad fraud poses a significant financial and reputational threat to fintech companies and explores strategic measures to combat this challenge.
At the core of the fintech industry lies trust. Investors, users, and stakeholders place immense value on credibility and integrity. However, fraudulent activities compromise this trust, which in turn jeopardizes long-term growth prospects and market standing. Ad fraud wastes budgets and skews valuable data, making it an urgent issue for fintech marketers worldwide. The immediacy of this issue raises the question: How can fintech companies safeguard themselves from the growing menace of ad fraud?
The Multi-faceted Nature of Ad Fraud
Ad fraud is not only a budget drainer but also skews key metrics like Customer Acquisition Costs (CPAs) and Lifetime Value (LTV), distorting optimization efforts. Fraudsters employ sophisticated techniques such as domain spoofing, ad stacking, and click injection, inflating costs while providing no real value. What complicates matters further is that ad networks often source traffic from multiple, sometimes unverified, channels, leaving fintech startups struggling to glean genuine user acquisition data despite significant spend.
According to Charles Manning, CEO of Kochava, ad fraud is an unavoidable reality that demands active combat. For fintech companies, the stakes are high—fraudulent data can not only undermine investor trust but also distort growth forecasts, posing risks beyond just advertising performance.
Beyond Financial Impact: Reputational Risks
Financial loss is only a part of the story. Ad fraud can also have dire reputational consequences. A glaring example is the Necro loader trojan incident of 2024, where over 11 million devices got infected through malicious ad Software Development Kits (SDKs). These SDKs launched invisible ads, executed remote code, and enrolled users in paid services without their consent. This incident, stemming from an unverified ad integration used by high-profile apps on Google Play, caused lasting damage to user trust and developer credibility. For fintech apps, primarily built on trust, the implications were particularly severe, threatening their very existence.
Solutions to Combat Ad Fraud
Mitigating ad fraud requires fintech marketers to prioritize clean traffic and ensure transparency. Real-time fraud detection tools, such as AppsFlyer, can filter out invalid traffic before it skews campaign results. However, detection alone is not enough. Ad placement plays a significant role. AVOW, a specialist in mobile Original Equipment Manufacturer (OEM) advertising, offers a robust solution by enabling fintech brands to run campaigns within secure, fraud-resistant ecosystems.
These ecosystems include prominent brands like Samsung, Xiaomi, Huawei, OPPO, and vivo. By allowing advertisers to bid directly on the device, AVOW eliminates intermediaries, ensuring full transparency and brand safety. Advanced targeting capabilities, such as appographic and behavioral targeting, further enable fintech apps to target high-intent users ready for financial activities like applying for loans and buying cryptocurrencies.
Real-world Success Stories
AVOW’s model is already proven. For example, Kredivo, a leading digital credit platform in Southeast Asia, achieved a 46% install-to-loan application conversion rate through AVOW’s OEM partnerships. Kelvin Saputra from Kredivo highlighted that AVOW drives less fraudulent traffic, allowing the company to focus on acquiring new users without the constant concern over fraud.
The Crucial Need for Clean Traffic
Ultimately, fraudulent traffic distorts growth metrics, corrupts data, and erodes trust—foundational elements in the fintech sector. Cleaning up traffic is not optional but vital for sustained growth. By integrating real-time fraud detection with transparent, fraud-resistant channels like mobile OEM advertising, fintech brands can focus on acquiring genuine users rather than chasing misleading metrics.
In conclusion, ad fraud poses a persistent threat that companies have to proactively mitigate. By embracing strategic partnerships and leveraging innovative solutions, fintech companies can significantly reduce the impact of fraudulent activities. Platforms like AVOW offer secure, transparent advertising solutions, ensuring that fintech apps thrive by acquiring real users. To sustain their growth, fintech marketers must prioritize clean traffic and employ advanced fraud-prevention tools.
