If not, you aren't just wasting ad dollars, you're risking legal action and potentially alienating your prospects with unsolicited phone calls.
As crimes go, committing digital fraud is pretty easy; you don't even need to leave your house. If you know what you are doing, the likelihood of getting caught is pretty slim. And you can make a lot of money.
Earlier this year, a group of Russian hackers made between $3 million and $5 million a day with an elaborate digital ad fraud scheme called Methbot, according to White Ops, a digital advertising security company. The criminals created phony domains that looked like reputable publisher sites. They tricked ad exchanges into serving video ads on their fake pages and then used an army of bots to click and view the ads so they racked up income.
That sure beats robbing a bank.
As entrepreneurs, we have to be aware of digital ad fraud so we can spend our hard-earned ad dollars wisely, and securely. Many companies use affiliate marketing in that they pay sites to help them generate leads, traffic or even sales. Used properly, affiliate marketing can be very successful. In fact, more than 80 percent of brands use it, according to this infographic from Acceleration Partners.
While most affiliate partners are above board, there are seedy players who will resort to shady tactics to make more money. Those dubious tactics are wasting entrepreneurs' time and money and affecting the validity of the leads they are purchasing. Affiliates are paid a set fee for every filled-out form they generate. Sometimes, fraudsters fill out those forms using real contact info they find easily online, e.g., the Yellow Pages, White Pages, websites, social media, etc. The contact info is legit, but the person didn't actually fill it out and isn't interested in the offer.
To protect themselves, many businesses send leads to lead-validation companies before calling on them. These vendors help clients sift through their leads, to determine what is worth pursuing. Often, validation companies don't catch this type of fraud. They simply verify that the data is correct, but they don't check to see if it was actually entered by the person with whom the data is associated.
Based on my experience working with marketers and the Leads Council, an average of 20 to 30 percent of leads that clear the validation process are actually fake. Sometimes, it can even be much more.
Insult to injury
As if wasting your money purchasing and validating a phony lead weren't bad enough, the damage for business owners doesn't stop there. Because the validation company thinks the lead is legitimate, marketers' next step is to call the person. There is nothing consumers like more than intrusive, irrelevant phone calls, right?. What a way to make a lasting brand impression...
Calling people who didn't submit their information also opens advertisers up to Telephone Consumer Protection Act (TCPA) compliance issues, which can result in time-consuming lawsuits and hefty fines. The TCPA is intended to protect consumers' privacy by regulating how marketers can reach out to them. Even if a business uses a third party for its marketing outreach, it is still liable should that third party break the law.
For business owners, the first step in protecting themselves from lead fraud is awareness. Many simply don't realize how prevalent digital fraud is, or they rely solely on lead verification companies to protect them. Adopting the following important two-step process can provide additional protection:
Verifying contact information isn't enough. Companies need to dive into the analytics and try to understand the environment in which a user's information was shared. Consider factors like the location of the IP address and the behavior of the user before filling out the form. There are sophisticated analytic tools that can help, such as Mouseflow or you can work with a partner.
Savvy marketers are constantly analyzing and optimizing their marketing tactics, trying to spend more on what is working and less on what is not. When phony leads make their way through the process, marketers' campaign optimization efforts can be compromised. Dollars end up going to these fraudulent, nefarious channels rather than where they would have done the most good.
You need to spot these fake leads, trace them back to their sources and revise your affiliate network accordingly. Are certain partners generating mostly fraudulent leads? Stop working with them. Where things get tricky is when a source is generating a healthy mix of legitimate and illegitimate leads.
Many businesses need all the leads they can get. Rather than removing the traffic source completely, they proceed to validate each individual lead and weed out the faulty ones. This is a complicated solution, but it is possible these businesses -- or you, if you're doing this -- have a solid system in place for analyzing your leads.
The right approach depends on your business and your resources, but it is paramount that all entrepreneurs understand the lead-fraud problem and take steps to protect themselves. You aren't just wasting ad dollars, you are risking legal action and potentially alienating your prospects with unsolicited phone calls.
Source: Rich Kahn, www.entrepreneur.com
MetaStudio is joining a growing list of online lending innovators exhibiting at LEND360, October 11–13, in Dallas, TX. LEND360 brings together the entire ecosystem of online lending, including consumer, small business and marketplace lenders, tech platforms, legal counsel, investors and more. More than 850 online lending professionals from across the globe connect for three days of sharing insights, innovations and information.
“We’re proud to be an exhibitor and delighted for the opportunity,” says Jon Cross, CEO at MetaStudio. “With all the potential customers and contacts there, we expect it to be very lucrative both near and long term for us.”
MetaStudio’s executive team will be on hand at LEND360 to demonstrate MetaStudio’s Lead Verification services. “Online lenders must use cutting edge technology to filter out fraudulent and bogus leads before going down the costly underwriting path. Otherwise, their cost per funded leads sky rocket and their profit margins plummet”, says Cross. MetaStudio’s technology is based on the experience of over 15 years of cyber threat analysis and protection, malware, phish and spam analysis, 40+ years of high tech engineering and 30+ years in National Intelligence. Visit MetaStudio at booth 10 for more information and a hands-on experience of the numerous Lead Verification products and their exceptional benefits to the online lending industry.
MetaStudio is a technology innovator in the online and mobile fraud detection and prevention arena. We strive to aid online fraud/risk managers, lead buyers, and marketing managers by delivering a world-class solution that provides quality, actionable cyber intelligence to help combat fraudulent registrations, bogus leads, account hijacking and organized cyber criminals. MetaStudio is based in Kansas City, MO and serves the lending, insurance, auto finance, affiliate network and lead generation industries. MetaStudio has a reputation for quality, reliability and performance.
Reaching the inbox has always been a challenge. Mailbox providers seek to protect their mailbox users and provide the best possible inbox experience, so they have strong restrictions in place on both what is accepted and whether it is placed in the inbox or in the spam folder.
Source: Return Path 2017 Benchmark Report.
I’ve been working in online marketing since 1998—the early days, before the bubble burst. So, I’ve seen a thing or two. As a business owner and former lead generator, I personally know the downsides of fraud. Fraud effects everyone in the online marketing chain and it has cost our industry an awful lot.
The number of online transactions is increasing, so companies of every size must be attentive in safeguarding themselves against online fraudsters and bad actors. Focused fraud control measures are crucial to distinguish the good customers from the bad. It could even determine whether companies are profitable or not. But, choosing those measures isn’t as simple as it sounds. With a wide range of outsourced fraud protection and managed service solutions available, each with their own features and benefits, merchants, networks, lead buyers and lead generators need to know how to make the right choice for their businesses. So, how do you weed through the fluff to get what you really need?
Transparency. Is the fraud protection company you are using or the ones you are considering using transparent? What I mean is, do their solutions tell you exactly what is wrong with the data? If not, you’re not getting the whole story. For example, I’ve seen reports and API responses from vendors that indicate the lead is “risky” or “somewhat risky” or has an “IP issue”. What does this mean? How can you identify the fraud if you only have some vague description of what might be the issue? If you can’t identify the issue, you can’t fix it. This is very relevant in the world of chargebacks with affiliates. These vague responses are not acceptable for an affiliate and only makes them mad about not getting paid for the lead(s). It doesn’t help anyone fix or improve anything.
Alliances. It’s not enough for a fraud protection company to have all the technology in the world if they are not part of a fraud alliance or network. Sharing with others (and receiving from others) known fraudsters, spammers and cyber-criminals will help suppress these bad actors. No company can do fraud prevention alone. Proprietary systems are great, but, we cannot live in a silo when it comes to fraud prevention.
Works Well With Others. How well does the system integrate with other platforms? Make sure your solution provider integrates harmoniously with your back-end systems, third party lead management providers, affiliate networks, shopping cart platforms and web forms. If they don’t, what’s the point?
Easy to Use. Many companies only focus on dashboards with pretty charts and graphs. Although dashboards can enhance the user experience, they don’t matter if the integration is so complicated that it takes a ton of tech time and maintenance. Be sure the service provider has easy to implement integration documents
Hopefully, you’ve seen a theme here. Black boxes, silos and vagueness are extinct business strategies and the companies who use them in preventing fraud and have a limited lifespan for truly suppressing fraud.