The headlines are filled with stories of millions of people falling victim to identity theft. In the past six years, identity thieves have stolen over $107 billion in the U.S., according to a 2017 Identity Fraud Study.

But in addition to making fake credit card purchases, fraudsters can steal online identities to perform other types of mischief that are more subtle but have a real impact on digital marketing effectiveness. These types of online identity thefts result in fake clicks and views that erode digital marketers' budgets.

As the founder and CEO of a company that actively fights ad fraud, I've seen firsthand that it takes anti-fraud solutions and detection methods borrowed from cybersecurity to identify the source of false identities to shut them down.

Stealing Identities To Create Fake Followers

Digital marketers are prepared to pay top dollar for endorsements from powerful influencers who have a huge social media following.

Fraudsters are taking advantage of the high demand by stealing real identities to create fake followers. They duplicate real people's Facebook and Twitter accounts, create artificial "likes" on a celebrity or influencer and sell the fake account, disguised as a loyal follower.

According to a recent report, 9-15% of active users on Twitter are fake accounts impersonating real people. And at the end of 2017, Facebook reported that 10% of the platform's total monthly user base (2.07 billion) are duplicate accounts, up 4% from 2016. Faking social media likes at this scale can circumvent assumptions about user profiles, their preferences and their influence, resulting in ineffective marketing decisions.

As a result of all the noise about fake followers, there has been some corrective action, but it’s not enough.

The New York Public Attorney, Eric Schneiderman, recently announced that he is opening an investigation into Devumi and its apparent sale of bots using stolen identities. Within 48 hours after the New York Timesarticle publicized the problem, Twitter took action and suddenly there were one million fewer followers. Angelo Ray Gomez, the youngest person to run for mayor in Nevada, lost 10,000 followers and Adina Porter, known for her roles in True Blood and American Horror Story, lost between 5,000-6,000 followers.

Although purging of fake followers showed immediate results, unless users are continuously inspected to make sure they are real, purged fake accounts can just keep coming back.

Targeting Fake Consumers

Fraudsters can also steal online identities to attract targeted ads. There are several advantages to hijacking real user profiles. Using real consumer data makes the fake accounts more believable because the information includes real purchases, and using existing data saves the fraudsters time and energy.

Since fraudsters introduce fake data, they can destroy months and months of data collected and used for digital marketing strategies and targeting.

Even the most basic data – for example, a user’s location – can be changed by using proxy IP addresses or applying fake geodata. BIA/Kelsey forecasts that location-based targeting will reach nearly $76 billion across local media by 2021. As a result of their tampering, fraudsters can capture a high percentage of location-based ad dollars, while making it more difficult for marketers to know the true location of their potential customers.

Even though stealing online identities may not deplete consumers’ bank accounts, it can have a significant financial impact on digital marketers’ budgets and undermine the effectiveness of ad targeting. Although strides are being taken to fight this phenomenon of fake profiles, the problem won’t go away anytime soon.

Meanwhile, the problem can be minimized by ad traffic quality teams deploying solutions and business processes to stop bad traffic from seeping in. This includes setting specific goals for clean traffic, and checking for suspicious interactions – for example, unbelievably high click-through rates, too may clicks from the same location or high amounts of interactions with no purchases. Once the source of bad traffic is found, if there has been a complete analysis and there is full documentation, you can begin the process of requesting reparations.

As long as identity fraud pays off, fraudsters will continue to find new ways to steal identities, thereby robbing digital marketers of their ad budgets and real data about users they want to target.