What is China’s ‘Wool Party’?

With more than 800 million users, unique farms are emerging in urban areas in the world’s largest smartphone market – China. Their produce? Ad fraud.
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One example of ad fraud places hundreds to thousands of iPhones or Android smartphones on shelves that are programmed to search, click, and download specific apps multiple times. Farms control app rankings on the app store and search results system

Farms are often used to promote apps to raise awareness of their own products, but there have also been cases where e-commerce sites write reviews to manipulate their search results. Fraud is rampant in all online industries.

According to Admaster, a Chinese digital marketing solutions company, more than 100,000 mobile phones have been discovered to be accessing websites all day long stemming from one location in Shanghai.

What are click farms? A shadowy internet industry is booming in China

90% of all views on a popular video site are fake

The fake view business is widespread. China’s state-owned media CCTV reports that 90% of views on many popular programs on video sites are fake. Contributors buy farm views to inflate their post and video views to attract advertisers

Fraud severely cracked down

Fraud techniques are illegal in China and are at risk of being detected and blocked by app stores like Apple, but there are farms everywhere. Every day, farm operators and Apple’s evolving algorithm are clashing.

The Chinese government has officially launched a campaign to eradicate e-fraud on e-commerce sites. China revised its anti-unfair competition laws to include any act that is fraudulent will be punished with a fine of about $30,000.

Farms are adapting by switching from robots to humans. Humans are causing difficulty for detection, elimination, and the crackdown on illegal activity.

China Has A Secret $50 Billion Dollar Click Farm Problem

On the popular messaging apps WeChat and QQ, there are group chats specific for earning money by downloading apps and reviewing them. Because they look like organic users, they are unlikely to be blocked by the app stores. Though they cost more than regular farms, this is considered to be both an effective and cost-effective way to promote an app in a short amount of time.

China’s Wool Party, a $10 billion gray industry

The number of people who are calling themselves the “Wool Party,” which can make more than 540,000 yuan (about $80,000) overnight through company promotions, is increasing. The Wool Party, sometimes also known as the Wool-Pulling Party, refers to those who legally make money using corporate online marketing promotions such as coupons, gift certificates, and cash rewards. The word originates from a TV drama that aired in 1999 where an elderly woman working at a village ranch stole the wool of a co-owned sheep and made a sweater for her husband. 

IT Companies bankrupt by Wool Parties

Wool Party members are technically savvy young people who share information on which companies to target next through an online group. According to a survey by China Securities Newspaper, black ash production (a legal but very malicious gray business industry) has already formed a huge profit of 100 billion yuan (about $10 billion) per year. Hundreds of thousands of dollars in damages to a large company may be relatively insignificant, but this can bankrupt a start-up company. 

Earn hundreds from home from bike-sharing

Bike-sharing company Ofo held a red envelope promotional campaign offering up to 5,000 yuan (about $800). It was revealed that some Wool Party members earned a lot from the campaign. By installing GPS spoofing apps, users could unlock bikes on the Ofo app and pretend to be using the riding service. There was a limit on the number of red envelopes you could earn on one account, but Wool Party members purchased accounts from others on the internet and earned thousands a day without actually leaving their rooms.

Music streaming services loses millions

On New Year’s Day 2018, music streaming site Tencent Music started a subscription promotion, but due to a server bug, users could purchase a subscription for just 2 cents instead of the original promotion price of $3. This mistake ended up attracting about 39 million users. Tencent had no choice but to accept their mistake and reportedly paid $7.6 million. Wool Party members are rewarded for exploiting the vulnerabilities of corporate campaigns. In most cases, businesses are legally powerless and can not fight back.

How can you prevent damages from farms?

Farming is constantly evolving and is difficult to prevent with standardized measures. In order to protect yourself from these kinds of fraud, it is important to analyze the data thoroughly and to check for any abnormalities daily. Phybbit works hard every day to detect and prevent various forms of digital fraud, including ad fraud.

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