Ad Fraud in the Metaverse

April 7th, 2022

What was your first thought when you heard about Facebook’s intention to change its name to Meta? 

It didn’t take long for the internet to react.

Some thought it was a joke – plenty of memes were doing the rounds as a result (my personal favorite had Mark Zuckerberg’s head ensconced in a block of feta cheese.)

Cynics thought it a PR exercise to distract from the bad press it continues to receive; issues around not doing enough to protect the mental health of users or contain the spread of conspiracy theories and misinformation.

Facebook employees expressed major concerns around how it’ll be policed on their internal communications platform, Workspace. One upvoted question, posed by a member of staff, asked: “How will we meaningfully put safety, integrity, and responsibility first in the Metaverse? We can barely cover the real world today.” 

But to Zuckerberg, it’s the future of the internet. Metaverse is happening, regardless of opinion. And big companies are already finding ways to promote their brands in a virtual world.

Advertising in the Metaverse

Take a drive anywhere and it won’t take long before you come across billboard ads. Now take this very simple concept and apply it to a virtual world, where brands have erected digital billboards to grab your attention. 

The template for such advertising is already evident within many online games, such as this example from Football Manager, where companies such as Bidstack enable in-game advertising on the billboards that run alongside the pitch.

Product placement is also a big opportunity for advertisers. As users build online avatars, clothing brands and sportswear brands have already made their clothing available in digital format to purchase. 

In addition, as users attend ‘live’ virtual events such as concerts and movie trailers, artists and filmmakers have the opportunity to advertise their medium to a wider audience, serving to increase brand capital in the eyes of the metaverse audiences.

In short, the opportunities for advertisers within the metaverse are massive. But wherever advertising lives, so does advertising fraud.

Defrauding the Metaverse

Unfortunately, another area where we may see a parallel between the real world and the virtual one is that of fraud, largely based around the currency of the metaverse: Non-Fungible Tokens, or NFTs.

Investopedia defines Non-Fungible Tokens (NFTs) as: “cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. NFTs can digitally represent any asset, including online-only assets like digital artwork and real assets such as real estate.”

In metaverses, NFTs are used to buy things like virtual land plots, event passes, avatars, and other digital items. They’re the digital answer to collectibles, and they’re big business – at the start of the new year, global NFT sales passed the $4 billion mark.

But, whilst the metaverse may be a ‘new’ concept, blockchain is not, and there are many known issues that have been subject to exploitation by fraudsters.

Blockchain-based transaction crime hit a record-high in 2021 – $7.8 billion was fraudulently obtained by scammers. 

Methods of cryptocurrency bot fraud are becoming increasingly complex as scammers are afforded the luxury of minimal risk associated with a lack of regulatory and KYC measures.

Here are a few examples of automated threats:

  • Account takeover attacks – where fraudsters use traditional phishing attacks to access accounts and steal NFTs
  • Bad review bot attacks – much as review sites work today, where bad reviews can be detrimental to a business, a plethora of bad reviews could sink NFT prices
  • Multi-accounting – where several accounts are set up on a metaverse platform to launder proceeds from criminal activity


Automated threats are expected to rise in the metaverse. Think of it as a playground for bots, good and bad. Digital advertising, if left unprotected, will be an additional vector to driving threats such as scrapers, spammer bots and even account takeover bots.

With that said, it’s going to be a while before the Metaverse arrives. In the meantime, we’d hope to see significant progress by existing metaverse platforms in preventing automated fraudulent activity.

Big tech could set the example in taking ad fraud more seriously, by rooting out bots and refunding illegitimate clicks and preventing skewed marketing analytics — A Major challenge in today’s age.

In the meantime, Lunio continues to provide advertisers with a proactive defense layer against ad fraud and increase the quality of their traffic and conversion rates.

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