New Year New Fraud: A Guide to Fraud in Your Online Marketing Strategy and How to Avoid It - Part 1

By Magdalena Wolak - Managing Director

Online marketing fraud; who really gets your hard earned money and how? Let's talk about it.

Annually, it's estimated that companies lose over 20 billion dollars to online marketing fraud.

And the numbers are expected to rise to 44 billion by 2022, according to Statista.

If that didn’t make you step back shook, we want to discuss the bigger issues we’re all kind of aware of but not sure about, and some of the most common (and some not so common) ways you could be getting fleeced or even worse, unknowingly be doing the fleecing.

Unsurprisingly, we’ve been shifting direction and expectations over the last 10 years into a more data-driven perspective. Having analytics and information at our fingertips is good. It helps brands focus and shows you as a business owner what the market was, where it is now, and hopefully where it will be in the future. That all helps with scaling and sale predictions.

But there are leaders in the industry that are beginning to question how effective that constant inflow of data really is. Are we relying too much on what an algorithm (with human error inevitably built in) is telling us?

More importantly, few people and business owners have the tools and knowledge to understand what's happening behind the scenes; if you’re not a developer, or have constant access to someone who understands code on a deep level, you have to trust another person to explain and navigate many of these risks for you without being certain they’re a) being honest b) using your inexperience to further their own, possibly ulterior goals.

The real drive behind data analysis and its influence on marketing strategy always comes down to money. Companies more and more often stray from old fashioned advertising, the kind that speaks to explaining and sharing information with our customers, to pulling information about customers instead.

Data analysis is something that we must do in the brave new world of online advertising to some degree, but it can lead to confusion, deception and billions on the line because you’re trusting people who know that data isn’t everything when it comes to marketing strategy, but they may be pushed to show expected results to avoid problems at work.

To that end, we urge owners and managers to really take the time to understand that data and numbers aren’t the only criteria that you judge a marketing team by. That kind of mentality is what’s driving this type of behaviour forward and up. Someone is making money off it, but it probably isn’t you.

We’re not going to talk about absolutely all types of fraud out there, because that’s a book-load, but we’re going to cover the main ones that could happen to you, and we will break this up into a 2 part thing to keep it manageable. Strap in for the main culprits.

Fake Leads

If you’ve ever had a secondary partner collect leads for you, this one is to watch out for. It’s easy to pack fake leads into a list that isn’t controlled by you or your company. It’s just as easy to create fake accounts (and characters) that pose as leads, resulting in lists of useless data that you end up paying for.

Where the lead was collected matters just as much. Demand the information on the website from which your list was created. This should always be freely given to you, since it gives you an idea what the client was looking for and therefore, whether they will be of any use to you. On the same note, offer presentation is vital. What were they being offered or looking for before the information was collected? Aged leads are one other issue; make sure the leads you’re paying for from a vendor aren’t leftover from days or weeks before.

Bot Traffic

Over 50% of the internet is speculated to be bot traffic. Anything that is not a human that is interacting with your sites or content is considered a bot. We’re not talking about the bots you want, like SEO crawlers and monitoring bots, the issue is with the ones harming your site and rankings, resulting in loss of massive amounts of money. They’ll scrape your site of emails, photos and more, spam your inbox or feed with weird messages and links, or click through your site leaving disproportionate analytics that don’t reflect your performance or acquisition. Did we mention it makes your site slower? You only have 2.2 seconds to load before over 50% of users jump ship, that’s not a lot of wiggle room for a site to bounce back from.

Incentivized Traffic

The line here is much more blurred depending on how you go about your campaign. For example; you’re running a campaign to get people to download your app. There will obviously be caps on the daily download minimum. Now, if you’re willing to pay people to download the app or in any way incentivise the download, that’s kind of what you’re working with. This one is often disputed, because both parties need to be in on the deal, and in theory giving away things to customers isn’t fraud. The jury is still out on this one.

Domain Spoofing

This one is a little easier to pick out, because it essentially means someone built a website from scratch to look as close to your legitimate website as possible, in order to gather your sensitive information. 

In URL substitution, your ad will be served on a different site than the one you bid on.

Then there’s cross domain embedding, where an unsafe (low quality) site is embedded as an ad-lookalike within a safe (high traffic) one, growing the bad one from the shadows.

How to avoid this happening to you:

My first piece of advice is to be scrupulous with who you have run your campaigns. Beware a company or person that will jump to agree to any results you ask for without some background information and a good thought-out plan. Quick growth and unrealistic numbers may be luck, but could just as well be the result of a company cutting corners and doing things in the shadows that are bordering illegal, if not outright so.

If the promise is too good to be true, it probably is.

Always ALWAYS ask to be kept in the loop with reports, updates and free access to your back-end. It’s YOUR information and you need it to cross check and keep on file.

Perhaps it’s time to look at the roots of what advertising was developed to be, and to keep in mind that hacking audiences and the technology built to engage them on a genuine level will always end up being a second rate approach at best, one that may in fact have quick short term benefits, but could just as easily hurt you financially. 

There’s no magic cure for growth and playing the long game with audiences who want to be there because they trust and enjoy your product is always the one constant piece of solid advice for strategy.

Our new year's resolution is to try to figure out the balance between classical intuitive advertising done as it has always been (centered around customer focus) and a new, more fast-paced and more data-based strategy that we’re still learning as an industry. It’s time to blend the two approaches into a new direction that aims to invade less and include more.

Leave us your information below if you’d like to get started on the right foot. A thorough consultation will be the first thing you can do to avoid potential issues and stress in the new year.