Lead generation agencies are always focused on growth and the quality of their leads. But when advertisers are willing to spend anywhere between $2 per lead to thousands of dollars per lead, depending on the industry, it comes as no surprise that more and more fraudsters are getting involved in the game and trying to steal their slice of the pie.

Unfortunately, getting bad leads is more than just a minor inconvenience. It can be devastating to your business, depending on how those leads are put to use. What exactly happens when leads are fraudulent? Let’s take a look.

Lower Return on Investment (ROI)

Imagine you spend $200,000 on a marketing campaign and generate 2,000 leads. Your cost per lead is $100, which is a bit on the high end but perhaps not the worst thing in the world.

Now, imagine if a fraudster got involved with your campaign. Since research from Adobe suggests that 28 percent of web traffic is fraudulent, perhaps that bad actor sent as many as 560 fake leads your way. Suddenly your cost per REAL lead balloons to nearly $139—an increase of 39 percent. At the same time, now that you have all these fake leads to deal with, your ROI plummets. Few businesses have that much wiggle room in their budgets. Even for those that do, it doesn’t make any sense at all to let fraudsters walk away with your hard-earned cash.

When ad fraud affects lead generation, you end up with significantly less ROI. At the same time, because your data is altered by fraud, it can also be difficult to plan future campaigns since you don’t really know how your current campaign is performing and what you can do to improve upon it.

Curious how much money you’re losing on ad fraud? Check out our ad fraud calculator to find out.

Bad Brand Reputation

In the internet age, your competition is always just a few thumb taps or mouse clicks away. If your customers don’t like what you’re selling or have a bad experience with your brand, they only need to run a quick Google search to see which other vendors exist to solve their problems.

Imagine you run a financial tech (fintech) company that lends money to small business owners, and you use forms to collect leads. For example, you might publish an e-book or white paper and put it behind a “gate” so that users can only access it if they fill out a form and give you their contact information. 

Now imagine someone named Sophie submits an online form. You study her information and it seems legit, so you pick up the phone and call her. When Sophie answers, she’s surprised. She’s never heard of your company before and is curious why you called her and where you got her information. Making matters worse, Sophie happens to have a large number of followers online. She writes a blog post warning those in her network to beware of your company, which seems to be doing something shady or unethical. Since 84 percent of people trust online reviews as much as they trust their friends’ recommendations, your company is suddenly in for a world of hurt.

Then the thought hits you: What if Sophie’s contact information isn’t the only contact information your business received because of fraudsters? Suffice it to say that this is never a situation you want to end up in.

TCPA Violations

In 1991, Congress passed the Telephone Consumer Protection Act (TCPA), which was originally designed to prevent telemarketing calls. Telemarketers would only be allowed to contact consumers if they obtained their expressed written consent. Since the law was passed, it has been updated to create a national Do Not Call registry and includes language to prevent marketers from placing robocalls or sending text messages without consent.

Marketers found to have violated the TCPA face fairly significant penalties. Believe it or not, they could even be on the hook for $1,500 per text message and phone call placed without the recipient’s consent. Take our word for it, these fines can add up quickly. Case in point: Resort Marketing Group recently had to pay up to $12.5 million to settle a class-action lawsuit, and a dietary supplement company was fined a whopping $925 million for running afoul of the law.

What does this all mean for your lead generation agency? 

It’s simple: If a fraudster targets your campaigns and sends fake leads your way, and you reach out to those leads, your firm is technically violating the TCPA. Even if the fraudster is making up information out of thin air and happens to come up with a random assortment of numbers that are on the Do Not Call registry, you still may be on the hook! If the goal of your business is to generate as much profit as you can, it’s safe to say you’ll want to avoid suffering such a fate.

Lower-Quality Leads

If lower ROI, a damaged brand reputation, and potential TCPA violations weren’t bad enough, you’ll also simply end up with bad leads should a fraudster try to game your forms. If your objective is to avoid calling the wrong people, you’re going to have to spend a good chunk of time vetting each lead to make sure they actually filled out the form themselves and you have permission to contact them.

Even in the best-case scenario, this is not an effective use of time. You’ll end up spending a larger slice of your day simply figuring out who you can reach out to.

And let’s hope that, when your campaign is targeted by fraudsters, you find out early on in the process. The last thing you want is to meet with your sales team and give them the game plan, only to find out later that pretty much every lead you gave them is fake. That’s not exactly the way to inspire your team to reach their full potential or to assure anyone of the seriousness of your organization, for that matter.

Now that you are familiar with the damage that fraud can cause your lead generation agency, it’s time to turn our attention to the easiest way to prevent fraud from hurting your campaigns.

Why Performance-Based Marketers Need an Ad Fraud Solution

The good news is that by investing in an ad fraud solution, you can largely overcome these problems by preventing them from occurring in the first place. Leading ad fraud solutions like Anura leverage the power of artificial intelligence for validating leads in real-time. This gives you the peace of mind that comes with knowing you’re only reaching out to qualified leads who are actually waiting for you to contact them.

At the same time, Anura also helps you ensure TCPA compliance, which allows you to avoid brand damage and potentially crippling fines. Instead of looking at the ad, Anura looks at the user to determine whether the lead is legitimate or not. That way, you won’t have to worry about calling up someone whose information was given to you by a bot or a fraudster filling out the same form over and over again with real information belonging to people who never consented.

When you pursue only the most qualified leads and protect yourself from potential TCPA violations, you develop a sterling reputation as an honest brand while increasing the ROI of your campaigns. What’s not to like?

To learn more about lead generation fraud and what you can do to protect your brand, download our free e-book, Lead Generation Fraud 101: The Complete Beginner’s Guide.

 

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