Why Has Digital Fraud Grown During The Covid-19 Pandemic?

Digital Fraud

Marketers and business owners watching the tech news during 2020 can be forgiven for thinking there has been a boom in digital fraud. From click fraud and ad fraud to ransomware attacks, there seems to be a new headline about digital fraud at least every month.

Looking back over the stats for the year, it is evident that yes, there has been a substantial boost in many types of popular cybercrime.

Why Has Digital Fraud Grown During The Covid-19 Pandemic? Share on X

Ransomware saw a bumper 2020, with an estimated $20 billion stolen. And ad fraud and click fraud, which were estimated at the start of the year to hit $24 billion, actually saw in the region of $35 billion siphoned off to fraudsters.

Where are these billions going? Why is this trend for cybercrime still growing and what has this got to do with the Covid-19 pandemic?

The Elephant in the room

Even during the pandemic, digital marketing has been a boom industry. Spending on programmatic marketing, such as Google Ads, Facebook Ads or social media advertising hit an estimated $435 billion in 2020.

With more people confined to their homes, the dependence on the internet for everything from entertainment to food supplies became a major factor in online traffic.

However marketers have long known that there is a major problem with the volume of fake traffic online. Many brush this off as ‘the price of admission’ for their PPC ad spend, or even focus on some stats that say click fraud has fallen.

However, data from click fraud prevention vendor ClickCease shows that in 2020, the pandemic caused a surge of 21% in fraudulent traffic in the early stages of the pandemic. And despite major global industries such as tourism, oil and hospitality being negatively impacted, this drop off was picked up by ecommerce, entertainment, health and on demand services.

For those not in the know, click fraud and ad fraud are the twin practices of fake clicks on paid ads. When you consider that a PPC ad can see a cost per click of anything from a few cents to over $100, the impact of a single fake click can have a big effect on marketers.

The impact of click fraud

Ilan Missulawin of ClickCease says, “Advertisers know that click fraud is there, but they often don’t understand the scope or severity of it. We’ve had clients who have come to us after signing up and have told us that they were staggered at the volume of fraudulent clicks on their ads”.

Add in the fact that click fraud doesn’t just target the big players, but small businesses and those who don’t have the expendable budget for fraud.

“At the moment especially, businesses are trying to make sure that every dollar counts in their marketing. You might lose one in every four clicks to fraud, which you might not see as a big deal. But when you consider that is a potential lost customer, it starts to make sense that stopping fraud is key to business success”.

Cyber crime on the rise

Data thefts, ransomware and identity fraud are also on the rise. So why such a big boom of all these types of digital fraud in 2020?

Put simply, many of these digital crimes are relatively simple to get started if you’re a knowledgeable web coder. Creating a network of malicious bots online, often referred to as a botnet, can be a simple process for some.

And with an increase in web traffic, it’s easier than ever to cast your net wide and bring in a big catch. Ransomware for example saw a growth in 2020 due to the amount of people working from home and not necessarily using the correct security to protect their data or networks.

Click fraud is often seen as the easiest of the cyber crimes, which is why it has the highest volume of fraud as a percentage per dollar. With so many advertisers scrambling to win new business online, fraudsters use bots to spoof websites and host ads wholesale. It’s practically a licence to print money.

So what can your average business or marketer do?

The digital fraud landscape in 2021

As the Covid-19 pandemic continues to grip the planet, the growth of fraud doesn’t look set to slow down any time soon. In fact, all forms of digital fraud have been growing year on year, even without the pandemic.

Fraud prevention is often the last thing that people think of when setting up their business ads, or if they run a digital marketing agency, for example. But it’s been shown that preventing click fraud can boost conversions by at least 14%.

And for data theft or ransomware, preventing these damaging fraudulent acts ensures a business isn’t offline for days, or suddenly out of pocket to the tune of millions of dollars.

Whatever your business is, making sure fraud prevention is part of your strategy is going to be increasingly important as we move into 2021. From staff awareness training to the use of technical prevention systems, make sure your business (and your budget) don’t become part of the statistics.

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General FAQs

Why does fraud prevention really matter?

Fraud prevention increases confidence in your organization.
Your demonstrated efforts to reduce the risks of fraud, both internally and externally, make you a better investment, business partner, insurance risk, and supplier. Controlling fraud risks should be an important part of it.

What is the most common type of online fraud?

The most common types of online fraud are called phishing and spoofing. Phishing is the process of collecting your personal information through e-mails or websites claiming to be legitimate. This information can include usernames, passwords, credit card numbers, social security numbers, etc.

How credit card frauds are happening in digital world?

Fraudsters can also purchase stolen credit card numbers from the dark web, this is a part of the web only accessed through special software. Credit card numbers are valuable to fraudsters, and they don’t hesitate to visit such illegal dark web markets. Fraudsters can be found in your own house as well.


Devendra Singh

Director, Content Strategy at Digital Marketing Trends. I develop, evaluate, and improve the company's content strategies. Providing a big online presence for SMEs and StartUps.