Ad fraud is a multi-billion dollar a year problem and according to one estimate, by 2025, the digital ad market could be the second largest revenue source for organized crime behind drug trafficking.

Ad fraud comes in numerous forms. There’s click fraud, for example, which for years has been a thorn in the side of marketers using pay-per-click advertising channels.

And in recent years, the rise of the programmatic has created a significant new ad fraud front. As Jeremy Hlavacek, VP of Global Automated Monetization at The Weather Company, explained, “Companies running the exchanges have perhaps been a little bit liberal in terms of who they let into that exchange.”

The complexity and opaqueness that is often present in the programmatic ecosystem has led to inventory spoofing and unauthorized sellers, among other things, problems that the industry is now trying to stamp out with solutions like Ads.txt.

Driven in part by fraud concerns, marketers have been turning to alternative types of digital advertising, such as native ads and influencer marketing, which appear to be less vulnerable to fraud.

But are they really less vulnerable to fraud?

Influencer marketing agency Mediakix has sparked headlines by demonstrating just how easy it is to scam in the now billion-dollar influencer marketing business.

In a blog post, it explained how it created two fake Instagram accounts, one, @calibeachgirl310, using photos of a model obtained during a one-day photo shoot and the other, wanderinggirl, using stock photos. It then purchased followers for these accounts, at a cost of $3 to $8 per 1,000 followers.

calibeachgirl fake insta

Initially, Mediakix limited the number of followers it purchased to 1,000 followers per day because it was “concerned that purchasing too many followers at the onset would result in Instagram flagging the account” but it discovered that it was able to add up to 15,000 fake followers at once “without encountering any issues.”

Finally, Mediakix paid around 12 cents per comment to generate fake comments on its accounts and between $4 and $9 per 1,000 likes to generate fake likes. For each photo on its fake Instagram account, the agency purchased between 500 and 2,500 likes and 10 to 50 comments.

The real fun began once the two fake accounts had 10,000 followers. ”Once we hit this threshold, we were able to sign the accounts up for a wide range of [influencer marketing] platforms,” Mediakix explained. And it started applying for opportunities on these platforms.

Ultimately, before Mediakix revealed its findings the fake influencer accounts were successfully able to land two paid brand deals for each account under which the non-existent influencers were “offered monetary compensation, free product, or both.” 

For obvious reasons, Mediakix’s experiment is raising eyebrows as it demonstrates that with modest effort and investment, it’s possible to create out of thin air “influencers” who don’t really exist and therefore aren’t likely to influence anybody.

While this kind of fraud does not affect the upper echelons of the influencer marketing world, where high-profile celebrities like Kim Kardashian are said to rake in five and even six figures per sponsored post, the implications are increasingly important. As Mediakix explained:

Brands and advertisers eager to reach audiences on popular social media channels and seeking quick entry into the influencer marketing space, are turning to platforms, automation and micro-influencers in hopes of making the media buying process more turn-key and easier.

By automating their influencer marketing efforts and working with so-called micro-influencers, marketers risk falling victim to the kind of fraud that Mediakix has demonstrated is not just theoretically possible but can be successfully executed in the real world.

While this doesn’t mean that marketers should avoid influencer marketing, or automation and micro-influencers, it is a reminder that the fraud risk is not limited to a few digital channels. Indeed, all channels are vulnerable.

Where the dollars flow, fraud will go.

As a result, marketers will need to be more vigilant about how they plan and execute their influencer marketing strategies. And just as many are starting to demand more of their vendors in other channels, such as programmatic, they would be wise to demand that the influencer marketing agencies and platforms they work with don’t ignore this threat.