Your Highest Converting Hosting Keywords Result in Fraud

Have you ever found a keyword converting so well that it makes your mouth water? One so juicy that you tell your boss about it, hoping for a pat on the back? Well, I found this keyword, only to discover that I am converting scammers, fraudsters and cheaters! What is this keyword that all hosting CEOs are going to ask their PPC Specialists to avoid?

Ok, now that I made you wait, that keyword is… “Instant VPS”. If you do not know what VPS is, please read What is VPS Hosting before you continue.

But not just Instant VPS, anything associated with it: Instant Windows VPS, Instant Virtual Private Hosting, VPS Hosting Fast Setup, and Instant VPS Hosting, etc. etc.

 

 

As illustrated above, “VPS Instant Activation” converts at 50%, “Instant Windows VPS” at 33%, “VPS Instant Setup”, 16.67% and “+VPS +Instant” (my favorite) converted 14 times at 11.11%!

For those that do not know how to get this data, please see my detailed instructions below on how to find exact match keyword conversion data from AdWords.

Although in my head I was imagining buying my first yacht, my gut told me this data was unrealistic. I should have listened to my instincts, but instead, I “liked” the idea of converting at an average rate of 13%. Who wouldn’t?! Well, after a couple months converting between 450%, my billing department told me they were having an increasing fraudulent signup problem.

Yes, fraudulent signups in hosting is not big news, but this time it was escalating.

At first I figured it wasn’t me – someone else caused it or perhaps it was even affiliate fraud. I don’t screw up: I studied Economics! That feeling faded within two or three hours of me getting knee-deep in data.

How did I know that the “Instant” keyword resulted in fraud orders?

When I took the conversion unique identifier from Google Analytics’s ecommerce tracking and matched it with the orders in our database, what I found was shocking: orders converted via “Instant VPS” turned out to be causing the chargebacks. Moreover, when I investigated my Per Visit Value within Google Analytics, I noticed something abnormal. I was getting $8-$200 per click in revenue from “Instant VPS” keywords. Who wouldn’t enjoy getting $8-$200 of revenue per visit for a product that has an average CPC of $8.This means that we would get $8-$200 per month for the life of the account. The average lifetime customer value is $300-$2000! Starting to make sense? It’s printing money, if it was true. What did I learn? Always trust your gut.

 

 

(If you would like detailed instructions about how I got this data, check the end of the post)

Before I was 100% sure that a keyword I was targeting was increasing fraudulent orders, I needed to figure out if anything else was stoking the fire. Could a poorly defined cancellation policy for our 30Day Money Back Guarantee have caused the problem? Or perhaps it was outdated fraud detection?

Since paying $1.50 per transaction to get the latest fraud protection was not sustainable, we implemented a simple policy call every client. This served multiple purposes, for not only could it improve customer service and satisfaction, it had the potential to stop fraud.

That was the tipping point that confirmed “Instant VPS” was causing the fraud. This is because 90% of the calls made to “Instant VPS” signups resulted in speaking to a little old lady who didn’t know what the heck I was talking about. Explaining VPS to everyday business owners is one thing. Clarifying what a VPS hosting solution does to a 50 year old lady that just got home from a doctor’s appointment is overwhelming.

So I began using negative keywords for Instant Setup, as well as 3D Secure. For online marketers that do not know what 3D Secure is, it is the Verified by VISA protocol developed by VISA to provide an extra layer of security. After the credit card details are entered, the customer is redirected to their bank to answer predefined questions about their identity. I must concede that as someone that cares deeply about conversion rates, I did fight this. Finally, after a month of negative keywords and 3D Secure, our billing department wasn’t approving fraudulent orders and our company saw a significant decline in chargebacks from VPS.

Why share this information with the public?

Maybe it was the angel sitting on my shoulder saying, “you should spread the word that these keywords result in fraudulent conversions.” Or, was it the devil on the other shoulder saying, “you should write a post explaining how well the keywords convert and other hosting companies will spend their entire budget on “Instant VPS”. Then you can then get a higher ROI on other keywords.” In the end, it was neither. I spent two months of my life dealing with scoundrels, scammers and spammers. I just wanted revenge.

Why do scammers target Instant VPS?

VPS hosting traditionally has a high fraud rate. This is because some bad customers signup for a VPS with the sole intent to use it to spam, host malware, or for botnet controllers. In fact, around 30% of all VPS orders are in fact fraud. When you add “Instant VPS” you’re looking at a fraud rate of 50%.

These creeps love the fact that they can go from one company to another using different stolen credit cards to get free service and run their scams. They do not talk to their victims on the phone like I do. These are real people. These are people living on Social Security. These are your parents. It’s sick. The hosting company, in order to protect IPs and their network, will eventually find these mischief-makers and shut them down. This is another reason why it is paramount to have an abuse team.

After the account is suspended, the hosting company gets a chargeback and the person they stole the card from doesn’t pay a dime. Everyone wins but the hosting company. That’s how the spammers think. It’s not always the case. Some of the older people go months without knowing.

What’s worse is that it can be like WhackaMole. You shut them down, but they have 30 other credit cards and fake identities ready. They won’t even move to another hosting company. They will just continue scamming you until you wise up.

Again, make sure you have an abuse department. As you now see, it’s even the marketing department’s responsibility to cross-reference campaigns with cancellations. If you do this, you should see some red flags. I did.

More keywords that cause fraud

If you sell Dedicated Servers, VPS, Cloud or Web Hosting, you should also be aware of other keywords that lead to fraud orders. Do your homework and determine how your conversions are billing. Ask questions like:

● What is the average lifetime value for the keywords you are using?

● Are the customers coming in from specific keywords ending up as chargebacks?

● What is the average value of a customer for the keywords you are using? (Hint, go to Google Analytics for that.)

(I would love to tell you about “good” keywords that convert really well, but my boss would kill me

for sharing.) Tweet this article or find me on Facebook and I will tell you more.

How do I fight fraudulent signups?

(Spamhaus.org was vital in helping me put this together.)

Stop Instant Setup

Some will argue that people want instant gratification. They do not want to wait for a 24 hour setup. Therefore, a keyword like “Instant Setup” should convert well. I feel, however, there is a high probability those people actively searching for “Instant Setup” have a corrupt motive behind their purchase. Sure, you may leave some conversions on the table. Why invite the scammers in the door? Not all hosting companies have a sophisticated abuse department, especially if you’re a reseller. I would suggest not letting the thieves even have a chance to see your hand. Once they are in the door, you’re going to start getting calls from your merchant account threatening to increase rates.

3D Secure

As much as I would like to fight 3DSecure because it has a reputation of hurting conversions, I must concede that 3DSecure did have a positive impact fighting my fraudulent signups; they also took a large portion of the chargeback liability off our shoulders. Therefore, I recommend it if you’re already having a chargeback and fraudulent signup problem. Now, I did see my conversion rate decline. Instead of complaining that my billing department was killing my conversion rates, I researched ways to optimizing for higher conversion rates. Ok, I cannot lie. I complained. In fact, I still take a jab every now and then.

Confirm Identity

At Superb Internet, we require all customers to chat or talk to our staff. This improves customer service as well as helping identify likely spammers. We also require everyone to pass a phone verification that tells our system that the person ordering has provided us with a real phone number.

Blacklist Abusive Customers

It is very important to have a database full of blacklisted IPs, Names, Addresses, Phone Numbers, and Emails. Without this list, I am afraid you shouldn’t be selling hosting as you will be scammed 24/7.

Terms of Service and Strong Chargeback Return Policy

If you have a 10, 20 or 30Day Money Back Guarantee, be sure to explain it clearly. Don’t make it hard to cancel the service this is bad business and may actually keep you from getting a good customer. Also, your TOS needs to be clearly defined and easy to understand. I know. I get it. Everyone wants to be an attorney and make a fancy sounding Terms-of-Service. The only thing you are doing with this is hurting your brand, as there will be loud complaints in forums all over the Internet with YOUR company name.

Monitor Your Network

If you don’t ensure that your customers are not abusing your network, you may find yourself out of business. Spamhaus.org gives a good example of this in their article How Hosting Providers Can Battle Fraudulent Signups.

In it, they say, “spammers and malware hosts frequently use a VPN to forward traffic from their permanent, backend locations on your server to botnet or snowshoe spam cannons or web proxies on a compromised server. They use stolen personal data obtained from an infected computer, or even the computer itself, to sign up.” The key is to monitor your network to see if there are traffic connections or relationships with known blackhat VPN nodes. This can detect abusers faster and will decrease chargebacks.

Use Customer IP Address Verification and Spamhaus DROP/EDROP to Filter Bad Traffic

Make sure you are checking the IPs against many blocklists. Be sure to read Spamhaus for more information about this. I also encourage hosting companies to use Spamhaus DROP/EDROP to filter bad traffic. Make sure the problem doesn’t come back by denying all traffic from or to those listed IP addresses.

Spamhaus DROP list:

● Spamhaus EDROP list:

● Spamhaus DROP/EDROP listing policy:

● Spamhaus BGP feed (BGPf):

More advice from Spamhaus.org

Spamhaus.org has more advice for stopping fraud orders. For example, limiting your customers to a certain geotargeted area until you have a department to fight abuse, and limiting your billing cycles to shorter terms for customers outside of that comfort zone. Scanned copies of passports, Ids, and a physical address can also help.

In conclusion:

Hosting is a very competitive niche. Everybody wants a high conversion rate. However, I encourage hosting PPC Specialists to be responsible and think like a business owner, instead presenting colorful conversion data from AdWords. The hosting company CEOs will respect you for it. I guess the idiom “Don’t put the cart before the horse” would apply. Whether the paid search is done inhouse or by an agency, hopefully, this article can act as some type of deterrent from so called experts getting credit by converting fraudulent orders. Hopefully this article will be part of the solution, demonstrating once again that pigs get fed and hogs get slaughtered.

I would like to continue this by asking some questions from the web:

Are there keywords that you know of that result in fraud orders? Has anyone else implemented Verified by VISA (3D Secure) What happened to your conversion rate?

The process of find the exact match conversion rates in Google AdWords:

Above I displayed my AdWords conversion data for “Instant VPS”. I am sure you already know how to get exact match keywords from AdWords; however, read further if you didn’t. Make sure view your keyword data for. Then click the keywords tab. Click all keywords and you’re there.

The process of finding keyword specific conversion data in Google Analytics:

Make sure you have Ecommerce Tracking setup. Under the Ecommerce heading, select Overview. Then click Source/ Medium. Choose Google/ Organic. Now click Secondary dimension. Under dropdown Traffic Sources, select Keyword. I searched for “Instant”.

by Richard Norwood

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