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5 reasons why online fraud detection is important for your business

5 reasons why online fraud detection is important for your business David Sendroff

Media buyers today have little knowledge about the quality of a traffic source, let alone an individual visitor.


Despite the widespread adoption of web analytics tools and increased data accessibility, knowledge about a user's authenticity is not part of the decision making process for some of the largest advertisers, agencies and networks. So, the question for anyone buying traffic online remains – is this user even real?


At the same time, internet marketers face a number of threats – from international fraud rings to botnets capable of generating millions of dollars in advertising value every day. The advertising community at large has very little to offer in response to these problems, which leads to a lack of transparency into the traffic and an overall decrease in campaign performance.


A new breed of fraud detection tools have risen to provide an answer. They include a number of features to facilitate real-time traffic filtering and a more efficient media buying process. These tools offer features like real-time user-level decision making, device fingerprinting, and comprehensive scoring models that directly correlate to data quality.


But why is it so important to invest in a fraud detection solution for your business? Here are a few reasons:


1. Expand revenue potential


By providing real-time intelligence about the quality of the source, fraud detection allows marketers to make educated media buying decisions before conversion metrics are available. This ability to quickly filter out fraudulent sources opens the doors to new channels, which previously involved a high level of risk and offered a lower ROI to the advertiser.


2. Recapture lost opportunity costs


At the same time, companies can reallocate advertising dollars from fraud to higher quality media buys. This is possible through a transparent media buying process, which sheds more light on the quality of individual sources. By transferring resources to more profitable sources of traffic, marketers can further increase revenue.


3. Minimise chargebacks with real-time knowledge


Certain performance metrics can take days or even months to process, but fraud detection is available in real-time, often before the publisher has been compensated for the traffic or the user has even made a purchase. This allow enterprises to pinpoint and eliminate fraud before paying the source, or worse, losing valuable business partners and incurring chargebacks.


4. Emphasis on quality


Businesses make smarter media buying decisions and attract new brand names to increase the breadth of business, all while regaining the transparency and control over the media sources. Providing higher quality data is a competitive advantage that attracts new business and allows agencies to open up a conversation about expanding the relationship with existing clients.


5. Centralised fraud intelligence


Fraud detection services benefit from the intelligence gathered from hundreds of millions of users and knowledge acquired from years of experience in the area. This focus provides the most comprehensive solution that would be very hard to develop in-house. Since online fraud is constantly evolving to circumvent detection methods, only a centralised fraud intelligence service can stay on top of the latest tactics.


In conclusion, it is important to remember that fraud detection is not just a technology, but a strategy. It needs to involve human intervention where analysts are able to review well-presented metrics and incorporate data into an integrated platform and where account managers are able to use this data in managing client relationships. By providing their technology, a dedicated support team and comprehensive training, fraud detection services can help businesses improve traffic quality and build a more efficient compliance process.


David Sendroff is Founder of affiliate fraud detection service provider CPA Detective.

David is a technologist and entrepreneur with more than 15 years of experience in the computer hardware, software, and network administration systems field. He is the founder of CPA Detective, an award winning global fraud detection...

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Comments

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Commenter: Matt Maddox

2013, September 25

As a compliance officer, and being in the industry for several years, I can appreciate what is being said and add my own experiences. Gone are the days where networks (or anyone marketing online, for that matter) could rely on simple sleuthing to identify fraudulent traffic. 6 years ago, many of the publishers were generating fraudulent leads with very little effort to disguise the leads. The bad leads could easily be found with just a glance at repeated IP addresses, false email addresses, problematic referring domains, etc. What was once a job I could do by myself in a few hours, became an unwieldy job that took up 75% of my week. Doing manual review on my own became more and more difficult and the fraudulent publishers became more and more sophisticated in their generation of invalid and fraudulent leads.

CPA Detective has been a lifesaver. They are able to focus on the trends and new techniques the fraudulent publishers use and appraise me of what they find. I can then review the data that they analyzed and hold the offending publishers accountable.

Having a partner we can trust, like CPA Detective, is an integral component of our fraud detection and prevention strategy. It allows us to more effectively focus on getting the right advertisements to the right people and maintain high quality while not sacrificing relationships with our clients or publishers.