When Art Imitates Life – User Acquisition Fraud on “Silicon Valley”

For anyone who works in tech, especially those of us living in Bay Area, watching HBO’s hit “Silicon Valley,” can be both hilarious and cringe-inducing as you watch similarities to your own life being mocked and played out brilliantly on the small screen. This week’s episode hit a little harder for us at DataVisor as we saw one of the enemies we fight against everyday – user acquisition fraud – make a guest appearance.

Jared, however well intentioned, turned to a click farm in Bangladesh to boost the user count for their music app, Pied Piper. The click farm was used to create thousands of fake users, leading to a big problem with potential new investors (no spoilers here) but for our own customers, we see these criminal enterprises wreck havoc every day in ways that can’t be fixed up neatly in a half hour, and with far fewer laughs.

Of course for our purposes, we don’t always see app owners or their marketing teams fronting the cash to these install farms. It’s less likely to be someone like Jared trying to boost some user acquisition numbers and more so a well-funded and organized criminal industry. It’s like Tony Soprano has finally moved his whole empire online.

Install Fraud, as we’ve covered before, is a huge and growing problem for a lot of app developers who are fighting for those top spots in the app store. The old ad models, based on impressions or clicks, are no longer reliable as criminals learned to spoof traffic. Now, by paying only when the app is installed for the first time or when a newly registered user launches the app multiple times, it becomes much more difficult to spoof app installs or simulate active users. But it’s not impossible. That’s where systems like click farms come into play and are paying up big time.

How big?  The average payoff for an install can be 430x that of an impression.

While app developers are often concerned with how fraud will impact their users, both from a user experience perspective as well as potential security issues such as phishing and spam, the inflated user acquisition count also impacts the app’s bottom line. App developers should not be spending  money to acquire users who aren’t real. VCs should not be investing in apps with over inflated (and fraudulent) user bases.

What can you do about it? There are few things we recommend – First, when it comes to app marketing, focus on user retention in addition to user acquisition and other post-install activities that are not as easily faked to reduce the rate of fraud. Also, don’t go it alone. Fraudsters aren’t working alone and it’s not a fair fight. Ad fraud is a security issue coming from organized attack campaigns, and so should be treated accordingly. Seek out technology partners (spoiler alert: like us) who can help you distinguish between legitimate and fraudulent traffic and users. It might not be as easy as it looks on TV, but it’s still a fight worth fighting.