Why online fraud comes with the territory

Breaking news: Not everything you see and read on the internet is true.

Hope you were sitting down for that surprising revelation. I know, I know, it's not that big a surprise, but it's constantly surprising that people are surprised by it.

A reporter from one of this country's leading metropolitan dailies contacted me recently about the late summer revelation from Facebook that some 83 million (or 8.7 percent) of its user accounts are fake. After all, Facebook is a platform based on the value proposition that its users are behind real identities.

"Doesn't this blow Facebook's value proposition out of the water," the reporter wanted to know. "Isn't this an incredibly high number of fake accounts? How could they allow this to happen?"

Relax. The problem is hardly endemic to Facebook. Whether malicious in nature or not, fake accounts come with the territory. (Facebook estimates only 1.5 percent of active accounts are, in fact, malicious while the others are mostly duplicates, users under the age of 13, your dog, etc.)

Why fraud comes with the online territory

Facebook is working to identify and disable fake accounts just as the search engines have been working to combat click fraud for years now -- just as ISPs work to block oceans of spam.

Oh, and did I mention fake online reviews? Yelp has resorted to a sting operation aimed at shaming businesses that are caught trying to game their ratings system. Yelp posts "consumer alerts" on the pages of offending businesses and exposes the emails those companies send to hire favorable reviewers. (TripAdvisor is also participating in its own version of the walk of shame.) So widespread is the fake-review practice that Gartner estimates by 2014, 15 percent of all online reviews will be fake.

Companies running online sweepstakes often encounter fraud, fakes, and undesirable metrics in short order. A few years back, I looked under the hood of several soft drink sweepstakes aimed at males aged 12 to 24 (Coke, Sprite, and Mountain Dew, to name a few of the brands). I asked Hitwise (now Experian Hitwise) to crunch the data and it found that the overwhelming majority of entrants were low-income females over 45 years old. These consumers weren't clicking on ads, but rather on a link on contest-aggregator site Sweepstakes Advantage.

Blame the internet or human nature?

Somehow, when fraudulent, misleading, or even unintentional things happen online, "the internet" is to blame (or Facebook, or Google, or the dating site that was a 14 year old girl's first step into a bad situation -- never mind that a 14 year old had no business being on the site in the first place).

No one seems to be stepping back and saying things like, "Contests are overwhelmingly popular with low-income, middle aged women. Is it wise to run a sweepstakes to reach young men? If we do elect to go that route, how can we ensure we reach the target audience?"

Just as retailers account for "shrinkage" in financial forecasts, digital marketers must account for the wasted clicks and impressions that come with the territory. There's always going to be click fraud. Chihuahuas and Yorkies will continue to update their Facebook newsfeeds (or, even further violating Facebook's TOS, allow others to do this for them). People who aren't 100 percent neutral -- like, maybe the owner's mother-in-law -- will review restaurants and hair salons favorably or unfavorably, depending.

Offline corollaries are much worse

While the media are quick to blame the internet for a multitude of crimes related to fraud, companies like Facebook, Yelp, TripAdvisor, Google, Bing, Yahoo, and all the major ISPs get little public credit or acknowledgement for their efforts to combat said fraud. Much of the knowledge we have of online misconduct was revealed by these companies themselves.

Acts of transparency and disclosure aren't always practiced by the offline bretheren of these companies. A quick search of "inflated circulation" results in a veritable rogues' gallery of news stories indicting companies like Time Inc., News Corp, Newsday and other major publishers of being caught in the act of not openly revealing they are combating a problem.

Forbes recently indicted USA Today for padding hotel bills to the tune of $82 million annually for those unwanted, untouched copies of the newspaper in front of your door in the morning (nearly one million copies per day that you probably don't read, and are probably billed for).

Online fraud? Yeah. It's a problem. It will always be a problem. Just like in the real world.

Rebecca Lieb is an analyst, digital advertising/media, for Altimeter Group.
 
On Twitter? Follow iMedia Connection at
@iMediaTweet.

"Word fraud from the old dictionary" image via Shutterstock.

 

Comments

Tom C
Tom C November 7, 2012 at 11:07 AM

Rebecca, I enjoyed reading your article, thank you.

I would like to add that yelp's own CEO, Jeremy Stoppelman, has admitted that his company has paid for reviews in the past.

This to me , in the light of their crackdown, seems hypocritical of them.

Here's the article I'm referencing this to:



http://bits.blogs.nytimes.com/2008/05/12/why-yelp-works/#comment-198253