In 2024, ad spending in the Digital Advertising market is expected to reach $740 billion. (https://shorturl.at/lnuL5) From the perspective of a fraudster, this translates to a sizable incentive to get creative and look for new ways to defraud advertisers and make quick money. Here are some of the most common methods for committing lead generation fraud:

1. Bot Fraud

Bot fraud is most common in pay-per-click (PPC) and pay-per-lead (CPL) lead generation campaigns. The fraudsters run massive bot networks that they use to commit click fraud. However, the use of bots in cases of social media fraud (creating fake engagement or followers) has been documented. In other cases, bots have also been used to fill out fake information on lead generation forms. The ultimate goal of using bots is to generate a bogus lead and credit it to the fraudsters whom the advertiser pays.

Bot fraud is one of the oldest techniques and has evolved significantly. Today, bots are powered by complex algorithms that allow them to mimic human behaviour and defraud advertisers.

2. Device Spoofing

Using one device to impersonate many different devices is known as device spoofing. Fraudsters use a device to generate a false engagement or lead by clicking on an advertisement. In some cases, fraudsters use a bogus form to obtain sensitive personal information from legitimate users. They use bots to fill out a lead generation form with false information. They are compensated for this poor lead.

They then use various browsers and reset their device's operating system (OS) to make it appear like a new device. The same device is used to carry out actions resulting in payments. This procedure is infinitely repeatable.

Modern fraudsters use sophisticated techniques to perform device spoofing, allowing them to circumvent the security measures implemented by lead aggregators and affiliate networks.

3. Incent Fraud

Many advertisers provide incentives or rewards to generate leads. For example, a banking app may provide cashback to first-time users. While incentive-based campaigns are frequently effective, they can quickly become victims of fraud, especially when the company partners with affiliates.

Many affiliates use unethical incentive campaigns to maximise their earnings. Affiliates promote the incentive for installing an app but do not discuss it. This may encourage the wrong people to download the app only to uninstall it after receiving the reward.

This results in a good use of money for the advertiser but profit for the affiliate. In other cases, affiliates use platforms such as Telegram to promote applications with erroneous messaging to entice users to fill out a lead form or sign up for the app.

4. Fake Accounts using disposable numbers/emails

Many fraudsters create fake accounts and commit fraud using discarded phone numbers and email addresses. This not only results in wasted ad spend and skewed metrics, but it can also result in a negative experience for genuinely interested leads.

Fake accounts can also be used to commit referral fraud on such a large scale that genuine users are prevented from benefiting from such a campaign.

How can Lead Validation protect your advertising campaigns?

Advertisers had few options for combating lead generation fraud for a long time. They had to rely on the tools and features provided by affiliate networks and lead aggregators and manually search for instances that appeared to be bots or fake account activity.

This took time and was not a fool proof method of protecting against fraud. Things have, thankfully, changed.

Advertisers can now access sophisticated ad fraud solutions such as mFilterIt's lead scoring tool. It employs AI and ML capabilities to detect and mark instances of fraudulent activity in the CRM in real-time. This data can help you avoid wasting ad dollars and even improve the ROI of your lead generation efforts.

Ad fraud is a harsh reality associated with the ease of generating leads online, and the only cure is prevention. Understanding lead gen fraud and how to prevent it is essential for modern marketers, as is having a robust ad fraud detection tool. Take action now to protect your campaigns.

mFilterIt, a leading provider of ad fraud solutions, provides a cutting-edge lead scoring tool that uses AI and machine learning to detect and prevent lead generation fraud in real-time. With mFilterIt's advanced fraud detection capabilities, you can protect your campaigns, reduce ad spend waste, and increase ROI.