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DM Confidential is a leader in the Affiliate marketplace. The DM Confidential Newsletter and web site is focused on the online marketing industry. To read more from DM Confidential visit: www.dmconfidential.com

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Fraud 2.0

Written on
October 26th 2007
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by DM Confidential  |
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handcuffed1.jpgAs though straight out of some biblical parable, for whatever reason, a percentage of those engaging in an activity will do it the good way while a percentage will do it the bad way. In sports or academics, they call it cheating. In our industry, they call it fraud, and despite that it can lead to a loss of revenue, relationships, even jail, it still exists. And, no amount of lamenting or commenting that these wonderful misguided souls could do so much good if they just chose to apply their efforts to more accepted and law abiding forms of productivity, it won’t go way. Worst perhaps, it only continues to evolve and become more sophisticated, just as their counterparts in the less dark arts continue to improve their services. Take spyware for example. Those behind one of the newest strains have the skill to excel just about anywhere; they could have gone to Google, had their food, dry cleaning, and options. Instead, they seem content to earn millions by letting everyone know indiscriminately of their gender or age that their male genitalia need enhancement, and continue to innovate new ways of spelling that would confound even those in charge of naming Web 2.0 companies. While our space and particular brand of direct / affiliate marketing tends not to deal with promoting oral enhancements, we certainly can’t escape the impact, perhaps wrath of those engaging in fraud. I know I wouldn’t want to run a click based business, and much of the fraud in our space focuses on those perpetrating against click based businesses. Given that our industry revolves around actions, not clicks, it has always felt that we had less exposure to the dark side, and to some extent I think that holds true. Unfortunately, we see now that this doesn’t quite hold true, as a new type of fraud has begun to rear its head. It’s being called the Indy virus, a somewhat politically incorrect name based on the role that those in India inadvertently or perhaps knowingly play.

If you wanted to make some relatively easy money, unethically, it unfortunately doesn’t take much. Sign up for an ad network, especially one that has incentive promotion offers and do the following - enter an email address, a reasonable one. Do this across five such offers, perhaps two to five times daily. That will give you fifteen to twenty conversions, which at $1.25 will mean around twenty dollars daily. Then find one or two lead generation offers, perhaps an auto finance or insurance offer. Fill out one of those every other day, etc. Before you know it, you could end up earning $500 to $1000 per month in extra income. And, given that the average larger size affiliate network has hundreds of people earning several hundred dollars per month, you could slide by unnoticed for a while. The relative ease of pulling off low volume fraud is the very reason why networks tend not to allow affiliates from dollar weak countries where that $1000 could mean a real income. The person might have a legitimate website, but the risk is simply too great to take a chance. And, while $500 to $1000 can add up, the ambitious folks want more, and they know they can’t do it alone. This used to mean writing scripts that would fill out these email only forms or go through an address book and enter real but nonetheless bogus data into data only offers. With volume comes scrutiny, and the beauty of offers like the incentive promotion one comes in the form of relatively real time feedback on performance. An email address or zip doesn’t make the marketer any money. Only actions throughout the flow do, so if an advertiser sees a bunch of conversions coming from a certain source id that yielded no real revenue they can spot fraud fairly quickly. In other words, you can’t quite teach a machine to be human, but you can teach a human, and here is where we get into the heart of the Indy virus.



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