E-Commerce - Cost Optimization by Preventing Bot Frauds

As an e-commerce business grows in size and scale, it emerges as a strong competition to both established and early stage businesses. At this stage, an e-commerce website owner is busy making critical business decisions based on website analytics and KPIs to increase sales. Unfortunately, these analytics based decisions are not effective when such growth stage e-commerce companies experience a drastic rise in online fraud via web bot traffic that hinders online efforts at sales, customer acquisition and more.

Online fraud using Bots on E-commerce websites has been a severe problem and is growing at a rapid pace because it is cheaper than ever to get into the fraud game and harder than ever to identify and block bots. Emerging e-commerce businesses start to experience multiple symptoms of fraudulent activities on their platforms:

• Sudden increase in server usage / Lower server capacity
• Seemingly incorrect metrics in Google Analytics
• Product prices on competitor platforms matching those on business in consideration
• Ad budget on Google Ads getting exhausted earlier than desired, with lower conversions
• Server logs showing a very low average time spent per page metric

These business degrading symptoms are a result of multiple fraudulent activities on e-commerce websites that are caused by competitors, scrapers and spammers.

1. Price Scraping - Done by competitors to extract product prices in real-time for price competitiveness (price war). Competitors run automated scripts to extract the product prices from the website under consideration, and update their pricing strategy in real-time to outbid emerging e-commerce websites from selling at competitive prices.
   
   

   Impact:

   • Loss of lower price advantage. Lower customer conversion
   • Higher load on server for processing scraping scripts / bots
   • Skewing of Google Analytics


2. Bot Abuse - Done by spammers and competitors to increase load on server. This is done primarily to overload a site with fraudulent, illegitimate traffic, which can ultimately slow down loading time of website and directly hit one's business. Ultimately, this will affect customer satisfaction and may even turn users off from making a purchase.
   
   

   Impact:

   • High server capacity utilization / over-utilization of server
   • Slower website load time for genuine users


3. Click Fraud - Rapidly scaling e-commerce businesses also spend a significant amount on Google Ads, which drives traffic to their website and results in more conversions. Automated scripts and manual click fraud techniques are used to generate fake clicks that exhaust the click budget.
   
   

   Impact:

   • Wastage of Ad spend with lower conversions
   • Skewing of Google Analytics and Marketing Analytics


4. Over-crawling - Over-crawling by genuine search engine bots does not account to online fraud, but is definitely a pain for a growing e-commerce business. Some web crawlers that do not bring a lot of genuine traffic to a website, end up over-crawling and increasing the server load without fetching returns. At InfiSecure, we realized 20%-60% of all server cost was attributed to these over-crawling search engine bots.
   
   

   Impact:

   • High load on server / Higher server cost

These online frauds are only some of the major factors to keep in mind. There are multiple other frauds like fake users, fake bookings, fake product likes and reviews, unwanted aggregators and others.

Here is a checklist of action items that you, as the head of a growing e-commerce business, should act upon:

• Check your historical server usage trends
• Check your historical Google Analytics data points
• Plot server usage versus total page-views graph and look for irregularities
• Check your Google Ad spend metrics and compare them with industry averages
• And lastly, check your competitors' websites for price competitiveness