Demystifying & Preventing Conversion Fraud
Conversion Fraud is a sophisticated scam where online fraudsters generate fake or subpar leads to generate revenue. But to understand its intricacies, we first need to delve into the world of click fraud–a widespread concern regarding Pay-Per-Click (PPC) campaigns. It is estimated, approximately 14% of clicks originate from unethical sources such as automated bots and competitors in a cut-throat sector. Scammers code these bots to click on ads and input personal data, which can drain your advertising budget and manipulate PPC campaign statistics. So today, we’ll explore the best ways you and your team can identify these scams and safeguard your digital marketing campaigns.
So What Exactly Is Click Fraud?
Click fraud is an online scam where fraudsters create phoney websites that look genuine to earn money from Google AdSense and Microsoft Ads by repeatedly clicking the display ads.
Each time a user clicks on an ad, it generates revenue for the advertiser (Google or Microsoft) and the hosting website. This system was designed to build income for high-quality content creators but has since been exploited by fraudsters who engage in click fraud to artificially inflate their earnings.
Google and Microsoft banned countless sites from these programs in retaliation. But the scammers didn’t stop there–they evolved the scam to utilise super-smart bots that emulate real humans and send them to their fake sites to click on ads.
Advertising networks can’t always distinguish between fake clicks generated by bots and real clicks from human users. As a result, businesses like yours could be paying for worthless clicks, as they come from non-genuine sources. This can lead to substantial financial losses, not to mention wasted time and effort on your part. It’s a frustrating and unfair situation that demands more attention and action to prevent further damage.
Demystifying Conversion Fraud:
The issue with click fraud is that while bots can generate a lot of clicks, they never actually follow through with a purchase or enquiry. This lack of conversion can flag the traffic as poor quality and result in ads being disallowed on the fraudster’s site, ultimately blocking their scam. To counter this, bots are now being programmed to generate low-cost conversions, such as filling out lead forms or signing up for mailing lists. The bots will then use mined personal data collected from fake low-cost ads to fill out these forms, making the conversions appear genuine.
Google and Microsoft will send more ads to these fake websites as the traffic appears to be converting and thus is considered trustworthy. And in turn, the scammer makes more money.
So if you’re reaching out to a lead who doesn’t seem to recognise your business or hasn’t inputted their data, this could be one of the first signs that your business may have fallen victim to conversion fraud and you should report it to your PPC advertiser.
How Can Click & Conversion Fraud Affect Your Business?
➩ It eats away at your advertising budget, which is hard-earned and should be used to reach real, interested customers.
➩ This fraudulent activity can lead to low conversions, high bounce rates, and distorted campaign metrics, making it difficult to assess the effectiveness of your advertising efforts.
➩ It can damage your business reputation when you reach out to supposed “leads” that are false, non-genuine clicks.
Preventing Conversion Fraud:
Conversion fraud constantly evolves, making it hard to pin down. But there are some ways you can prevent it from affecting your digital marketing efforts:
➩ Add a captcha to website & landing page contact forms or an invisible honeypot to receive only real human form submissions.
➩ Keep a watchful eye on your metrics: While Google has a system for filtering out suspicious activity, you should still monitor your traffic sources. Look out for any influx in campaign activity or ad expenses. Additionally, take note of the origin of your traffic. If you see a sudden increase in traffic from an area you’re not targeting, consider blocking the IP addresses from your ads settings.
➩ Regulate your campaigns by only targeting specific locations.
➩ Stop your business appearing in the display network: If you’re running a standard ads campaign on Google or Microsoft, you can restrict where your display ads appear. Just select “Google Search Network only” in your Google settings or go to Settings > Other settings > Decrease Audience Ads Bids by 100% in Microsoft. While these actions can protect you from conversion and click fraud, remember that you may miss out on valuable leads from the display network.
Google Performance Max
Google Performance Max is one of the latest advertising campaign styles introduced in December 2021. It automatically creates banners and display ads that can be displayed across all platforms, making it easier for businesses to reach potential customers.
However, one potential issue with this campaign is that you have less control over where your ads are being displayed. This means that if you suspect your advertising budget is being spent on leads that aren’t genuine, the only option is to pause your Performance Max campaign until Google addresses the issue.
Final Thoughts
Conversion fraud can be a nightmare for businesses that rely on Pay-Per-Click advertising to reach their target audience. The consequences of falling victim to this scam include financial loss, damaged brand reputation and distorted campaign metrics. Regularly monitoring your PPC campaigns is the best way to safeguard your business against potential conversion fraud.
As we’ve discussed, online fraudsters constantly evolve their methods, making it a challenge to keep up. That’s why we create these blog posts to help businesses like yours stay one step ahead and achieve long-term success in the digital marketplace. We hope you and your team can now confidently identify these potential scams and take preventive measures to protect your digital marketing campaigns.
