arrow left facebook twitter linkedin medium menu play circle

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

By Sean McDermott June 28, 2016

Photo of Sean McDermott

about Sean McDermott
Sean leads the social commerce sales efforts at Datavisor, a cutting-edge fraud detection platform based on AI and machine learning. As a sales manager with over 12 years of experience in sales, Sean is adept at selling complex and sophisticated technologies. In the last 5 years, he has focused on selling Enterprise AI Fraud Products, quickly gaining expertise in different machine learning techniques including supervised, and unsupervised for the data science buyers.

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.

Popular Posts

Intelligent solutions. Informed decisions. Unrivaled results.

DataVisor Fraud Index Report: Q2 2019

Learn More

The DataVisor Q2 2019 Fraud Index Report is here.

Customers online want convenience, ease, and access. Fortunately, your business offers it all. Unfortunately, that’s what fraudsters want too. To a cyber criminal, those features means vulnerabilities. To bring you the very latest and most actionable insights about where the risks are and what you…

Dumb & Dumber vs Ocean’s 11

Learn More

Understand the range of modern fraud attacks to ensure complete coverage for your organization.

Complex and coordinated fraud attacks that are extensively planned, hard to detect, and highly scalable are the new normal for online platforms. Explore and understand the full spectrum of fraud attacks—from simple to sophisticated—and learn how you can defend against each type in this…

Diagnose and Defeat Application Fraud with the Latest AI-Powered Tools

Learn More

Learn how leading financial institutions are using ML to proactively detect card application fraud.

In this insightful webinar, you’ll explore how organizations are leveraging AI-powered fraud management solutions to get tangible, real-world benefits as they work to proactively detect and defeat sophisticated modern fraud attacks. Plus, you’ll discover strategies for empowering cross-team…

Protect your business, your customers, and your data.

Request Demo