Fraud 101: What Every Business Should Know

Fraud 101: What Every Business Should Know

A lot of ad fraud is conducted via bot programs that fill out forms and produce bogus leads, but those are not the only methods that fraudsters use to steal money from advertisers. Click farms (also known as click farms) are a type of human fraud farm that allows fraudsters to commit click fraud and other ad fraud schemes while making their schemes even more difficult to detect.

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What exactly is a “click farm”? What impact do they have on your advertising campaigns? Most importantly, how can you identify and prevent click fraud from having a negative impact on your company’s financial performance?

What Is a Click Farm and How Does It Work?

A “click farm” is a fraudulent enterprise that takes advantage of large numbers of inexpensive workers to manually click on paid advertisements on the internet. Human click farms, like their bot counterparts, cause significant disruption in the digital advertising industry. Click farms are comprised of people who click on advertisements with no intention of converting. They only go to places and collect impressions that aren’t worth anything.

Click farms may also use form bots to fill out forms with fictitious information, resulting in the generation of fraudulent leads in some cases. This may be a genuine nightmare for internet advertisers who rely on solid leads to generate their business.

How Do Click Farms Operate?

Click farms are used by fraudsters for a variety of reasons. Click farms can be used to do a wide range of tasks on behalf of their customers and clients. The following are some of the reasons why fraudsters have turned to click farms:

  1. Taking on the Competition

Outside “clients” have been known to hire click factories in order to undermine their competitors’ digital ad efforts. Farm laborers click through advertisements in an attempt to deplete the advertising budget of a competitive advertiser in exchange for a fee. Once their competitor’s finances are depleted, the farm customer’s advertisements have a better chance of being seen by potential customers.

This is frequently employed in Pay Per Click (PPC) campaigns in order to swiftly deplete a target’s advertising budget. The fraudster simply instructs their “farmers” to click on the competitor’s Google SERP display advertising over and over again until the entire ad budget has been devoured. Because of this PPC advertising scam, fraudsters are able to run their own ads virtually uncontested, even when they are targeting incredibly expensive keyword phrases.

  1. generating revenue from advertisements and bogus social media profiles.

Farmers can also benefit directly from the utilization of click farms in the form of financial gain. Some scammers construct websites that are only for the purpose of selling advertising space, utilizing networks such as Google to do so. Once real advertisements appear on the page, the farmer urges their employees to interact with the advertisements, resulting in additional cash for themselves.

In recent years, click farm shenanigans have spread to social media platforms as well, as evidenced by click fraud on fictitious Facebook accounts. Despite the fact that they may garner a large number of likes, click farms on Facebook can actually lower engagement rates and harm your company’s Facebook profile over time.

You’ll find a list of tales concerning click farms being utilized on Facebook, as well as guidance on how to avoid click farms and other information about these fictitious click operations if you search for “click farm facebook” online.

Many farms are now selling profiles, users, or accounts rather than just clicks. Because these accounts are generated by genuine human users and contain information that appears to be legitimate, they are able to effectively navigate security filters on social media platforms such as Twitter and Instagram.

  1. Disguising Their Fraudulent Activities

One of the reasons fraudsters resort to click farms is that human fraud detection is difficult to come by nowadays. Human conduct, on the other hand, is more complicated and unpredictable than bot activity. Therefore, simple click fraud security tools will have a far more difficult time identifying and preventing click fraud from these farms in the future.

In the early days of click fraud, platforms such as Google and Yahoo responded rapidly by implementing filters to prevent automated clicks. However, the filters did a poor job of preventing bogus clicks made by what appeared to be genuine site visitors to the site.

Because of this, fraudulent actors could circumvent simple click fraud detection techniques and continue to collect illicit ad revenue through click farms.

Click Fraud and Social Media: What You Need to Know

The like button, which was first introduced by Facebook in 2009, quickly became a standard social media feature, with iterations appearing on Instagram and Twitter as well. Originally, it was intended to elicit an emotional response; you actually “liked” the content that was being shared. It was decided to replace the “Become a Fan” feature on Facebook Pages with the “Like” button in 2010 in order to maintain consistency across the entire site.

Likes, which are now widely regarded as the social media currency, are frequently utilized by marketers and advertisers to gauge popularity and engagement. However, when it comes to accumulating likes, number is not necessarily preferable to quality in every situation.

When we looked at click farm operations in the previous section, we briefly discussed how some fraudsters use them to artificially inflate their social media profiles by clicking on the “like” button on Facebook and other social media platforms in order to make themselves appear to have a larger following than they actually do. Consider the issue of phony likes on social media, as well as how click farms help their fraudster customers get a competitive advantage.

Fake Likes, Upvotes, and Engagement Are a Big Problem

Likes and upvotes, as well as other user engagement data, are frequently used by Facebook (and other social networking sites) to determine the popularity of a post. This, in turn, has an impact on how that post is presented to other users and what advertisements are displayed (if any).

Engagement rates beyond a certain threshold indicate to social media platform providers that the page in question is credible or authoritative in some way, hence boosting the possibility that a post will be shared with other users.

A post on Facebook might be recommended to more people if thousands (or hundreds of thousands) of people click on the “like” button and then add thousands of comments.

In contrast, if all your post receives is likes and no one comments, your engagement rate may suffer, and your post’s chances of getting promoted to others may be diminished. When you collaborate with a fraudster who employs click farms to artificially inflate their interaction, the “fans” they send your way are almost certainly just the click farm’s employees, who will just read and like your posts before rapidly moving on to other things, according to Facebook.

One of the most significant drawbacks of purchasing phony likes from a click farm operated by a fraudster is that it skews your marketing statistics. The “like” button is an important element in the development of user profiles. Based on the sites and posts that a person likes, Facebook can create a profile of that individual’s demographic and psychographic characteristics. This is a tremendous advantage because it allows you to simply drill down into your audience statistics.

It is true that if half of the audience is made up of phony likes, the data would be inaccurate. This means that Facebook (and other platforms) may begin attempting to place your material in front of an audience that is not appropriate for it.

The practice of buying likes on Facebook is not strictly illegal, but it does violate the social media site’s terms of service. Several announcements from the platform have been published in response to bogus likes, with the platform underlining that they will “aggressively go after the bad actors behind fake likes because businesses and people who utilize [their] platform want real connections and outcomes.”

When it comes to creating bogus profiles for click farms, how difficult is it?

Even a fraudster requires a social media account to be associated with a particular activity in order to obtain a like. This entails providing information such as your name, address, email address, phone number, and birthdate. You may think that a fraudster would have a difficult time getting over this obstacle, but that is not the case. It is possible to create a Facebook, YouTube, Twitter, Reddit, Instagram, or other social media account in a very short period of time.

Fraudsters frequently have access to a vast database of genuine customer data that they’ve either stolen themselves or purchased from cybercriminals on the dark web, according to the FBI. They may just copy and paste the information from the table and make minor adjustments to the email address, and they’ll be good to go.

With over 7 billion individuals on earth, it is not uncommon for Facebook and other social media networks to have a few names or even addresses that are repeated from time to time. If you wanted to, you could even create a second Facebook profile for yourself that contained all of the same information (including your name, address, and phone number) with ease—the only thing you’d have to change is your email address.

It is possible that you will receive a message that your data has been removed or changed on your main account because it has been used and verified on another account, but this will not prevent you from creating the second account.

As a result, making bogus Facebook accounts is simple—and there’s nothing actually stopping fraudsters from simply generating a million “John Smith” profiles with slightly tweaked information using free Google email accounts, as well. Fraudsters and their click farm operations take use of these weaknesses to the greatest extent possible.

How Fraudsters Benefit from Click Farms

Doug Bock Clark conducted an investigation for the New Republic in which he investigated the subterranean world of click farms. While visiting a “account farm” in the Philippines, Clark watched how phony users are created for the aim of selling their services.

A farm worker begins creating a fictitious character with the use of online name generators that are widely available. Some generators provide merely first and last names, while others produce more detailed results, including randomizing information such as mailing addresses and birthdays. In the following step, the worker establishes an arbitrary email account for the “user.”

Then there’s the real Facebook registration process. The “user” already has a name and an email address, but Facebook requires a cell phone number as well, for the purpose of verification. Nothing to worry about, the worker will take care of it. In this case, a fresh SIM card in an old cell phone will suffice.

After receiving a confirmation text, the worker enters the code, and a new confirmed user is added to the network, bringing the total number of verified users on the site to an estimated 81,000,000 individuals. The “user” can then be sold to a farm owner in exchange for likes and follows.

We are already aware that the text message test is simple to pass. Facebook, on the other hand, has put in place additional safeguards to screen out bogus accounts. In order to assess whether or not users are real or bots, the network use an algorithm that they would not divulge.

Fake user profiles, on the other hand, depending on the manufacturing standards of the account farm, usually pass the test. When a profile appears more real (that is, when more information is filled out), the less likely it is that Facebook will flag it as fraudulent.

Not only that, but the fact that actual humans, rather than algorithms, are in charge of setting up and controlling the accounts doesn’t help either. Compared to bot behavior, account behaviors such as like posts appear more natural because real people are behind the scenes instead of computers.

Click Fraud Can Derail Your Advertising Campaigns in Three Ways

Pay-per-click advertising is often considered to be one of the most effective strategies to allocate your digital marketing budget. The average cost per lead (CPL) for search engine advertising in 2022 is $110, programmatic display advertising is $38, and traditional advertising (TV, radio, and print) is $619. According to Linchpin SEO, the average cost per lead (CPL) in 2022 for social media advertising is $110. This means that creating leads through online marketing channels costs a fraction of what it costs to create leads through traditional advertising.

The truth is that Google claims that businesses generate an average of $2 in revenue for every $1 they spend on Google Ads, according to the company. As a result, the pay-per-click advertising sector has experienced substantial growth throughout the years. In spite of the impact of the COVID-19 pandemic, according to Fortune Business Insights, the PPC industry is expected to rise from its current value of $12.58 billion in 2019 to $28.62 billion by 2027.

Undeterred by the fact that wherever there is money, there will be con artists searching for a quick buck. What impact does click fraud have on your advertising campaigns? Click fraud has several harmful consequences, which are listed below:

  1. Advertising money that was thrown away

When it comes to the consequences of click fraud, the most evident is the way it wastes your online marketing spending. It is possible that the fraudulent charges will quickly deplete your advertising budget without offering any genuine return on investment (because the clicks are originating from fake sources that will not convert into actual consumers).

How much money does click fraud cost marketers on an annual basis? According to Statista research, the expected global cost of ad fraud in 2021 was projected to be approximately $65 billion. In addition to the lost advertising money that was squandered, the additional expenditures that organizations experience as a result of trying to deal with the various consequences of fraud must also be considered. Click fraud accounts for a sizable portion of the entire cost of the campaign.

  1. Marketing Results Information that has been distorted

When your organization develops advertising campaigns, it is normal practice to leverage prior marketing results as the foundation for future advertising initiatives. What happens, though, when the historical data is incorrect?

Pay-per-click advertising (or any other type of ad campaign) suffers when you use faulty data to make decisions. You’ll quickly discover that your ads aren’t reaching the right audiences at the right times, your messaging is ineffective, and the leads you do receive aren’t as good as you would expect. Marketing data that has been tainted by fraudulent activity from click farms can cause major problems for your future ad campaigns unless you are able to identify and exclude this fraudulent behavior.

  1. A shorter campaign lifespan for pay-per-click advertising

A objective of click fraud, when perpetrated by an unscrupulous rival, is to reduce the duration of your PPC advertising campaigns, which is one of the benefits. For example, suppose you place a daily limit on the number of clicks on your PPC campaign in order to avoid cost overruns.

Through the use of a click farm and automated software, a fraudster might create hundreds of thousands of clicks on your advertisements in minutes, essentially deleting your PPC ads from Google search and other online platforms. The competition can then halt the bogus clicks for the rest of the day when their actual advertisements begin to appear. This strategy inhibits legitimate leads from seeing your ads, resulting in a lower return on investment.

The following are five tips for detecting and preventing click fraud

So, what can you do to keep click fraud out of your present and future ad campaigns? Here are some suggestions: How can you prevent fraudsters from profiting or exceeding your daily advertising spending limits while also ensuring that your advertisements provide a healthy return on investment? To get you started, here are a few ideas to consider:

  1. Do not purchase likes or followers on social media platforms.

Artificially increasing likes, subscribers, followers, and other social media metrics simply isn’t worth the effort or time. Even though you’ll spend money on an activity that makes your social media presence appear larger than it actually is, the distorted metrics from purchased leads will not help social media networks effectively identify your audience so that your content may be shown to them. In order to avoid polluting your own marketing data, it’s advisable to avoid answering the siren’s song of purchased likes and follows.

  1. Spend some time adjusting the parameters of your PPC ad targeting.

The use of tight targeting settings around your Facebook ad campaigns adds an additional degree of security from unwanted clicks and impressions. Because of the social network’s targeting capabilities, it is now easier than ever to target individuals based on specific criteria such as geography, age, gender, and interests. Metrics can even be used to exclude specific categories of individuals from viewing your advertisement.

In order to maintain the integrity of your company page, it’s a good idea to check your follower list on a regular basis for suspicious accounts. To get a list of your followers, go to your Page settings and select People and Other Pages from the drop-down menu. You can use this section to individually remove or ban accounts that you believe are engaging with your material without your knowledge.

This similar piece of advice may be applied to a variety of different marketing outlets as well. In order to make your targeting as accurate as possible, you must first ensure that you have solid, clean data that is devoid of fraudulent activities to work with.

  1. Do not purchase advertising space from publishers with whom you are unable to communicate.

Unfortunately, not every ad publisher or supply-side platform (SSP) provider will be operating in a lawful and ethical manner. The internet is full of scammers who specialize in collecting your money and running your ads through click farms to make it appear as if they’re getting results when in fact, they’re not.

For some publishers, it’s not uncommon for them to establish fictitious personas. If their reputation in the advertising arena is already poor, they will require protection because they have been banned by a number of websites for producing poor traffic. As a result, they will act as another individual or company, take your money, and then flee. The time has passed by the time you understand that they were a dishonest advertising partner: they have vanished with the money you invested in them.

Not only does it help to reach out to potential advertising partners directly and arrange a personal meeting (or at the very least a phone or video conference), but it also helps to contact other companies that they have claimed as clients and inquire about their experience. Vetting ad partners can be a critical step in ad fraud protection because it allows you to identify a fraudster at an early stage of the crime.

  1. Keep track of where your traffic and clicks are coming from and adjust accordingly.

Do you know where the majority of your clicks are originating from? If you don’t, you may find yourself as a convenient target for a click farm business in the future. “Leads” that come in from areas where your company does not conduct business aren’t actually leads at all because they will never convert, no matter how hard you work to get them to convert.

For example, if your business is mostly based in Cincinnati, Ohio, but all of your clicks are coming from IP addresses registered to somewhere in China or Russia, it’s possible that you’re receiving clicks from an offshore sweatshop that operates a click farm.

Of course, more advanced click farms may employ virtual private networks (VPNs) in order to conceal the origin of their clicks. However, if you observe that a large portion of your traffic that isn’t converting is all coming from the IP address of a VPN provider’s data center, this could be an indication of fraud on your end.

Another disadvantage of doing this manually is that it can take a long time to check your IP address information and establish whether or not the activity is fraudulent. This provides the fraudster with a broad window of time to steal your marketing funds and flee with them. Additionally, simply blacklisting IP addresses is not recommended because it runs the danger of destroying a good thing while trying to fix a bad one.

Consider the following scenario: you want to blacklist an IP address that is used by a prominent VPN service. What about all of the legitimate leads who rely on that service to keep their personal information safe while shopping online?

  1. Make use of an anti-ad fraud solution.

To truly put a stop to click fraud, you must be able to identify fraudulent clicks as soon as they occur. Real-time ad fraud detection, on the other hand, is practically impossible to do with manual methods. Anura’s ad fraud solution can be a lifeline for your pay-per-click (PPC) advertising campaigns in this situation. To reliably identify fraud, our ad fraud solution evaluates hundreds of data points about website visitors and compares them to a decade of genuine conversion data. This reduces the danger of false positives while increasing the accuracy of fraud detection.

By flagging leads as fraudulent in real time, you can take proactive steps to prevent payments from being made to the perpetrators of fraudulent activity. This is significantly less time-consuming and resource-intensive than attempting to track down a fraudster and recover the fraudulently obtained funds through a lawsuit.

Real-time detection of fraudulent clicks can be extremely beneficial for advertising platforms, as it allows them to invalidate the click and ensure that it does not count against their customer’s ad campaign in the first place. While this decreases the likelihood of chargebacks, complaints, and litigation, it also results in more satisfied advertising consumers who will be willing to spend more money because they are receiving high-quality lead generation.