Alternative Market Briefing

Muddy Waters exposes Approving (APP) as potential AdTech fraud

Friday, March 28, 2025

Matthias Knab, Opalesque:

Muddy Waters Research has released a damning report on Approving Corporation (APP), accusing the AdTech company of systematic violatios of third-party platforms' terms of service (TOS), deceptive business practices, and inflated claims about its advertising efficacy. The report suggests that APP's business model relies heavily on retargeting rather than genuine customer acquisition, with incrementality far below CEO Adam Foroughi's claims of ca. 100%.

Key Allegations

Retargeting Dominates, Incrementality is Low

Muddy Waters estimates that 52% of APP's e-commerce sales are retargeted, with true incrementality at just 25%-35%, contradicting APP's claims of near-100% incrementality.
Analysis of 37 million unique users across five advertisers revealed that only **3.4% of users clicked APP ads, while 52% of attributed sales were from users who initially engaged via other platforms.

Systematic TOS Violations and Fingerprinting

APP allegedly collects proprietary user IDs from Meta, Google, Snap, TikTok, and Shopify without consent, stitching them into Persistent Identity Graphs (PIGs) - a form of fingerprinting prohibited by Apple, Meta, and others.
Code evidence shows APP labels these IDs as "keys" and uses them to gain an unfair advantage in ad auctions, effectively hijacking attribution from competitors.

High Churn and Misleading Disclosures