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Appodeal. The biggest fraud in history. My investigation

07-05-2015, 02:58 PM
#1
Appodeal. The biggest fraud in history. My investigation

Beware mobile devs!

Update: Please note I don't post any personal information in this thread. Appodeal owner publicly connected his name to the company in several places (e.g. github, twitter, facebook, linkedin).

I believe this forum seen many scam reports
So here is my dramatic report of many weeks deep dive into the Appodeal's internals.
www.appodeal.com claims to be ad revenue optimization tool.
I used tools like tcpdump/tcpflow/wireshark combined with some mitm assistance (see fiddler) and long term app behaviour observation to prove the fraud.
(literally by filming actual app's screen and counting banners on the device running app with appodeal sdk and comparing my numbers to stats on the backend)
I uncovered that this so called "revenue optimizer" network is total fraud and scamware!

Please take no offense. Its just some info I have to share with you. Everything is up to you. Make your own decisions!
Please verify everything by yourself. I'm not going to participate in any debates.

So the Appodeal scam is HUGE. And it is ongoing. Right now.
Its a multi million dollar fraud using some botnet like methods like manipulation of the App Store and Google Play rankings, shaving their partners and much MUCH more.
I uncovered botnet-like network activity originating from the Appodeal SDK
This behavior is concealed by default and activated only by their command server under certain conditions.
They claim to be ad revenue mediator and optimizer network. Lol. Their actual purpose is fraud.

So how does it work?
Appodeal's partners signup hoping to get more money / fillrate / eCPM. Appodeal states to be an effective "mediation tool" okay
However this is only the smokescreen for the original criminal scheme!
By integrating the SDK, developers voluntarily (yet unwillingly!) participate in their distributed botnet-like ranking manipulation system!
And all of their app's users do.

Ok cool but really how it works??
Appodeal partners sign up and install Appodeal's SDK into their apps.
Appodeal's binary code gets executed each time the user launches an app on his device.
Then, the code runs with the game and help Appodeal owner Pavel Golubev to get rich by exploiting traffic from all participating devices of this distributed network.
For example ordinary Joe the iOS developer links Appodeal SDK binaries in his apps.
App users install and run Joe's app on their own iOS devices.
Appodeal code executes on their devices and botnet starts to operate!
Of course Joe is not aware of this activity.
He expects this SDK to make a good job honestly downloading and mediating advertisements from 3rd party ad networks (like Admob, Vungle and so on)
However, I studied the traffic from some devices comparing it to the factual banners on the real device's screen as well as with the appodeal's backend stats. And got some hard facts. They shave up to 30% of traffic!

So what does the botnet do?

1. The Distributed Ranking Manipulation system!

By the packet from Appodeal server, SDK switches from getting fair ads to rotation of Appodeal's own interstitial.
This create very intense and very focused promotion of specific product affiliated with Pavel Golubev. They just select the target and voila all the "infected" devices start to promote their apps and manipulate the Appstore and Google Play, all at once!

Please note, that this activity originates from the vast distributed network of many many devices. Of course it influences Google Play and Apple's App Store rankings.
This promotes their own apps to the top charts!
Our poor Joe wouldn't even get a penny from it! These "special" banners are NOT billed to Joe's balance at all!

Conclusion: Appodeal just steal from the devs and use the userbase to promote their own affiliates. Using their "voluntary" bot network! As devs are voluntary sign up and install their SDK.

2. Appodeal network uses system's own accounts in all 3rd party Ad Networks. Ads are tracked by the system directly, putting our Joe out of the loop.
Joe isn't allowed to enter his credentials to link his own accounts.
So Joe couldn't even get the real stats!
This is solid foundation for ripping off their clients.
Thanks Appodeal for being so kind to the users helping them to create all accounts "automagically" lmao
Anyway this is the basis for statistics manipulation.
You can compare appodeal stats with actual banners impressions. Just count inside your impressions. Compare with the backend stats. And see the difference.
They just STEAL your money. Check it for yourself before they didn't hide it for a moment while talks starts to spread.
Simply there is NO way for app developer to verify the real numbers of actual ad impressions.

Of course their system conceals this activity very well. If you really want to catch them by your own, just playtest for a while to catch this behavior on a device!
It took me more than 20-25 hours to capture it.
Looks like the network is still in beta. And they promote only limited set of their own apps for test purposes. But this could change.
I had to record and review many hours of video from my device until caught them up!
So to summarize:
- Appodeal shaves their partners
- They use their system to manipulate App Store and Google Play ranking using distributed mechanism (exploiting end user's traffic)
- they don't share the profit with their partners! just scavenging the traffic

I repeat please don't trust my words and check it for yourself.
Do whatever you have to do.
Unfortunately I cannot upload my video/screenshots because they are filled with data and can accidentally reveal my ip/other private details
But I'll encourage you to follow my way and explore it by yourself.

One last question:
1. Shall I continue the publication of my investigation, with more facts, video and screenshot (but I need to blur my sensitive data somehow)
2. Or its better to send all data to the FBI?

Last edited by whitehat; 07-06-2015 at 12:48 AM. Reason: minor edits
07-06-2015, 02:47 PM
#2
My name is Pavel Golubev, I started Appodeal.

Indeed, Appodeal is an ad revenue optimizer, that pulls higher numbers from ad networks. I started Appodeal because I got sick of ad networks built in favor of advertisers and decided to create something for publishers.

Most likely, person, who started this thread is someone, who got banned by Appodeal for artificial activity.
The whole story is made up and has no real evidence.
Anyway, I feel obliged to respond:

1. Appodeal, Inc. is an open and transparent company, registered in Delaware. It has recently raised a $3.1M funding round (http://crunchbase.com/organization/appodeal). It has successfully passed due diligence. I was born overseas and came to the U.S. to build a great company, to meet and work with great people here in Silicon Valley, to improve the mobile advertisement industry and take it to the next step. I invested all my money in Appodeal, I sold my car, I moved to a smaller apartment. Now you are saying that I did all this just to start some pathetic fraud? Your accusations are pointless. The reason I reveal my Facebook and my Skype (and my other personal information) everywhere is because I'm not afraid to share anything about myself I have nothing to hide.

2. When we started Appodeal, my goal was to optimize earnings coming from our own apps. My previous company published over 3000 apps on Google Play & iOS since 2011. We made Appodeal available for everyone, when we managed to improve our inventory earnings up to 270%.

3. There is a lot of background activity initiated by Appodeal SDK. The purpose of such activity is to run an auction among ad networks and pick the winner ad network that offers better rate for your traffic. Auctions are running constantly.

4. Appodeal is not taking any of your traffic, it does not charge any commissions and does not cut anything from you.
We make money by selling a part of your traffic at a higher rate to direct advertisers, but only when they can offer a better rate than ad networks.

Sample 1:
- Admob offers $0.003 per impression.
- Chartboost offers $0.002 per impressions.

Impression is sold to Admob and $0.003 is paid to publisher.

Sample 2:
- Admob offers $0.002 per impression.
- Chartboost offers $0.003 per impressions.
- Direct advertiser offers $0.004 per impression.

Impression is sold to direct advertiser, $0.003 is paid to publisher, $0.001 is retained by Appodeal (because it managed to sell your impressions at a higher rate than any other ad network).

5. If topic starter had a single fact, he/she would post it.
There are several referrals to tcpdump/wireshark/fiddler etc in the post, but not a single traffic dump is attached.

If you want to continue this discussion, please submit some real evidence, traffic dump with your explanations would be great.

Appodeal is a unique, great and innovative company that protects publishers interests on mobile ads marketplace, rather than advertisers.
Appodeal signed up over 2000 app developers in less than 6 months.
Most of them confirmed earnings improvement.