Modern online companies need not only to find new channels to attract customers and sell their services in the market but also to be able to analyze the quality of these channels and assess the associated risks.
One of the main problems of fraud in the commercial environment is that the barrier to entry is lower than in credit risks, and accordingly, the level of fraud is higher. It results in the fact that the entry barrier for online fraudsters is significantly lower. They do not need to search for data or vulnerabilities in the market of personal data sources. As our estimates show, on average, 25-30% of traffic is either artificial or toxic. Meanwhile, the industry sees the highest level of fraudsters.
Another problem is the inability of professional lead generators to clearly identify the source of either high-quality or poor traffic. Despite the fraud itself (potentially risky traffic), companies also face low-quality toxic traffic, which practically does not convert and can exceed the size of the fraud. Following our expertise, all traffic can be divided into several major groups:
- Around 25% of traffic with a sign of high risk;
- Around 45% of traffic is associated with toxicity and risk level;
- Only 30% of traffic comes with lower-than-average risk.
What Types of Traffic Can We Highlight?
All available methods of attracting traffic online can be divided into two major groups. They involve independent traffic generation (known as organic traffic) and utilizing partner resources (affiliate or partnership marketing campaigns).
Organic traffic is one of the most time-tested, simplest to understand, and well-known methods. It involves driving organic users to the company’s landing pages, websites, or mobile applications through various marketing tools, such as SEO promotion, contextual advertising in various search engines, etc. The potential client immediately lands on the online business platform and gains access to the product or service. The advantages of this approach are transparency and direct access to the audience and potential customers, and the ability to use all available tools for analysis and decision-making. The main difficulties are the high cost and the expertise requirements. Teams constantly need to work on improving targeting and advertising mechanisms, testing different scenarios, copywriting, and advertising materials. Essentially, this is a business within the company with its own P&L and key performance indicators.
Affiliate or partnership marketing is a method of driving customers through partnership networks with access to traffic, on a pay-per-action model, for example, for every approved credit application. The advantages of this model include obtaining quick and relatively inexpensive access to a broad target audience compared to various existing tools for growing organic. It offers convenient automation and scalability. In addition, it does not call for extensive expertise. The entire acquisition process boils down to the API connectivity of those lead generators or brokers who will supply the required traffic.
Types of Fraud Related to Organic Traffic
Organic traffic fraud is often associated with the generation of "non-productive" traffic. Studies show that humans generate less than 60-70% of internet traffic. Ad fraud significantly impacts campaign effectiveness and ROI, despite the promotion budget.
Cheating competitors may use click fraud to distort an online company's organic traffic assessment. It can be achieved through displayed ads, videos, social media channels, or searches, often using anonymous VPNs. Such traffic does not generate revenue, which may prompt companies to abandon this promotion channel. Click bots, programs for automatic ad clicking, are becoming increasingly popular. They account for 20 to 60% of all clicks, negatively impacting return on investment.
Bots are automated software applications that visit websites or use online services. However, it is worth noting that not all bots are harmful. For instance, search engine scanners, that index web pages, help improve search results. On the other hand, malicious bots collect data or initiate DDoS attacks. Companies need to recognize bot traffic to secure their resources and ensure the reliability of their online operations.
Malicious bots can distort website analytics, leading to inaccurate data analysis and unverified business decisions. They can consume server resources and telecommunication channels, slow down website performance, or cause downtime, resulting in losses. Scraping bots can steal content, thereby violating intellectual property rights and damaging brand reputation. Additionally, setting up bot blocking and detection can strengthen a business's network and server infrastructure against DDoS attacks and hacking attempts.
SDK-Spoofing is a relatively new type of mobile fraud that involves creating the appearance of mobile app installations using malicious code at the SDK file level.
Click injection in some way is similar to fraud using click bots when it comes to affiliate marketing fraud. When the Android app is being installed, device-related malicious software initiates a click on the app, attributed to its advertising account. Thus, for each click, the company pays money to the affiliate who did not actually bring the customer to the target page.
Cookie stuffing is one of the most common types of fraud associated with affiliate marketing. A fraudster can discreetly add dozens of affiliate resources to a company's website by replacing the browser's cookie files. When a user clicks on a link and performs a targeted action, the company pays a commission for a lead that it essentially generated itself. This fraudulent scheme also results in traffic that initially has no conversion potential.
The main red flags of this type of fraud may include a sudden increase in expenses for affiliate marketing without a proportionate or noticeable increase in ROI.
Ad stacking is a common type of mobile fraud. It mainly occurs in advertising with payments per click. Here, multiple ads are stacked on top of each other letting the user see only the top one. As a result, the advertiser pays for impressions and clicks, even though the user doesn't see the ads.
Pixel stuffing considers placing ads in a confined website area, for example, as small as 1 by 1 pixel. The user doesn't see this advertisement, but the company is still charged for impressions.
What Are the Ways of Minimizing the Fraud Risk?
Businesses need a solution to keep their 1 USD-worth assets safe. To make it possible, we have developed a new solution called JuicyFilter. It is a reliable safety mean for downloading applications, media assets, and basic bot filtering. Currently, we are in the final stages of developing the new product.
Essentially, JuicyFilter is a system that reacts to signals, which is involved in the decision-making process. In case of risk, the system triggers back-push events. This solution will address a range of tasks:
- Identifying potentially risky events for existing clients, such as remote access during online sessions, sudden changes in risk profile or user motivations compared to previous sessions, and a wide range of other high-risk events;
- Determining device-assisted parameters during the first visit to the aggregator's website, i.e., when the intention to obtain the product was converted into a specific action;
- Identifying user behavior patterns, including various anomalies detection, risk and stop markers based on device and internet connection at the time of filling out the initial application for the target product; Increasing overall informativeness through data that is unique at some markets or different from traditional sources.
The JuicyFilter solution makes it possible to significantly filter out apps with signs of high risk. It also detects globally soaring commercial fraud. We provide one of the fastest and most effective solutions on the market (response occurs with a delay of 200-300 milliseconds, including data delivery time), and we are very pleased that our solution can exceed our clients’ expectations.
JuicyScore experts recommend that companies operating online adapt their anti-fraud technologies to keep up with the constantly evolving methods of online fraud and counter new types of commercial fraud. Utilizing alternative assessment tools on their platforms will provide a significant competitive advantage to brokers and aggregators.