You hear a lot about impression-based fraud in the CPM world of advertising, particularly in programmatic display and video, but we don’t hear a lot about fraud in lead gen programs. Let’s take a look at the indicators that help you know if you are experiencing fraud in your lead gen programs and how you can stop it.
In lead gen programs, media partners only get paid when a lead is generated. The conversion event is tied to the user completing and submitting a form. However, because there is no actual financial transaction taking place (i.e., bad actors don’t have to pay the advertisers to trigger the conversion event and get paid out), lead generation still attracts its fair share of fraud. However, lead gen fraudsters’ goals and incentives are very different from legitimate users, which means their behavior often leaves telltale signs of their misconduct, regardless of how carefully they attempt to conceal their activities.
When running a lead gen or other non-financial conversion campaign, here are a few things you can look for to determine whether fraud is hitting your performance traffic.
4 Types of Lead Gen Fraud
1. Low quality leads
Leads need to be qualified before they’re considered promising. Bad actors that complete lead gen forms will submit either bad information, (the person doesn’t exist) or recycle stolen information (capture real peoples’ information on fake forms and recycle it to multiple advertisers). Lead quality will vary from business to business, but it’s important to monitor the lead quality score of each of your lead gen media partners and watch out for potential fraud.
2. Low click-to-conversion rate
It’s important to monitor for extremely low click-to-conversion rates or the number of converting clicks vs. the number of non-converting clicks. Your advertiser should know what the typical range for post-click conversion rates is.
3. High-identity theft rates
Identity theft is a huge problem throughout the world. Some 15 million consumers were victims of identity theft in 2016, up 16% from 2015. Online and phone purchases using stolen credit card numbers (otherwise known as “card-not-present fraud”), increased by 40%. And identity thieves don’t just target credit card information anymore—account takeover fraud, which involves leveraging stolen log-in information to access a customer’s accounts—also increased by 31% in 2016. Your advertiser will have several processes in place to handle these types of situations on its e-commerce site. However, it’s important to maintain an open dialogue with your client and identify instances where this is happening in order to work together to reduce this type of fraud.
4. Numerous chargebacks or reversals
Unlike other indicators, this particular method relies on bad actors completing a financially based transaction (such as an e-commerce checkout). These fraudulent players claim credit for the conversion but later on attempt to reclaim their money through chargebacks or reversals. For example, they can call and cancel the order shortly after making it. This way, they claim the credit at the conversion event, and use back channels to cancel the purchase. An advertiser will know what its typical chargeback or reversal rate is—be vigilant if certain sources exhibit higher-than-normal reversal rates.
Diagnostics to determine if there’s fraud in your lead gen conversion traffic:
- Contrast typical lead scores and conversion rates for leads coming from your partners.
- Ask your clients about cases of identity fraud so you can monitor your sources.
- Have your client keep you informed about chargebacks and reversals so you can monitor your sources.
Want to find out more about how to spot fraud in your marketing program? Download our eBook, How to Spot Telltale Signs of Fraud in Your Performance Traffic, and discover where to spot possible leaks and how you can fix them.
