A Hybrid Method to Detect Deflation Fraud in Cost-Per-Action Online Advertising

Web advertisers prefer the cost-per-action (CPA) advertisement model whereby an advertiser pays a web publisher according to the actual amount of transactions, rather than the volume of advertisement clicks. The main obstacle for a wide deployment of this model is the deflation fraud. Namely, a dishonest advertiser under-reports the transaction count in order to discharge less. In this paper, we present a mechanism to detect such a fraud using a hybrid of cryptography and probability tools. With the assistance from a small number of users, the publisher can detect deflation fraud with a success probability growing exponentially with the fraud amount, and can estimate the amount of frauds. Our scheme is amiable to both the advertiser and the users because the existing transaction model remains unchanged. It is also efficient and scalable as the incurred communication, computation and storage costs are independent of the number of transactions.