Affiliate marketing is a good way to earn money with content and reach audiences who otherwise wouldn’t look your way. Offering a commission based on the amount of traffic caused by an affiliate link in a piece of online content can be an easy way to drive traffic to your product or services. As an element of digital marketing, it creates an effective means of growing your business and increasing your earnings.
However, it is not always as secure as you may think, with bad apples on the internet looking to commit affiliate fraud to gain more money from you and undermining your advertising investment.
There are ways to avoid affiliate fraud and weed out the bad apples from your otherwise rife garden. Take a look at our guide to understanding affiliate fraud and how to avoid it to safeguard your business.
What is affiliate marketing fraud?
Affiliate marketing is based on performance. In a nutshell: a link is embedded in a blog, someone clicks the link, the blog’s owner gets paid. The more clicks it gains, the more money the blog owner is paid. The commission is dependent on how much traffic it drives to your site, so affiliate fraud becomes the act of affiliates inorganically driving more traffic.
And it’s a bigger problem than you’d think. Research shows that over 35% of digital ad traffic is fraudulent.
The types of affiliate fraud
Unfortunately, there are a number of ways to give the appearance of boosting traffic without any real person on the other end of a monitor.
One common means of gaining an unfair boost in money out of affiliate commissions is to take advantage of the pay-per-click campaigns with click fraud. Click fraud sees a variant of fraudulent or invalid clicks through the use of bots or another user-simulation software. Content creators have been using bots to fake traffic for years to convince brands that they have enough followers to justify gaining the marketing deal in the first place.
Another form is typosquatting, which sees users hijacking a similar URL to your company’s name, which causes the traffic to go to their website rather than yours, depleting your revenue and wasting your marketing budget. In the same vein, traffic diverting uses what is known as “parasite sites” to steal traffic from a legitimate affiliate site.
Browser cookies can also be used for fraudulent purposes. Since they track the traffic of affiliate referrals, fraudulent affiliate holders can add a variety of cookies to a visitor’s browser to earn the commission if that user ends up making a purchase. Only one purchase has been made, but your business will think various users have purchased your product.
Attribution fraud, or app installs, allow thieves to steal credit card information to install apps, which will manipulate app tracking attribution platforms. Malware installed in a user’s device will “listen” to the user’s activity and will trigger when a new app install begins. It will then search for campaigns relating to the relevant app and flood them with fake clicks, giving the impression of far more traffic than in reality.
How to prevent affiliate fraud
If your product relies on affiliate marketing, these underhanded schemes can cause devastating losses. You might be paying for clicks that won’t increase sales, or face expenses, affecting your bottom line, or even be unjustly blamed for scammers working against your deals.
Fortunately, there are ways to deal with these scammers. Unfortunately, most of the methods used come down to prevention or cutting ties.
There are a variety of methods for spotting what you may suspect to be a fraudulent affiliate. The most basic and effective is to start with screening and communicating with your affiliates. Create a strategic vetting process to weed out any illegitimate affiliates so there are no deals made with bad actors. It will go a long way to avoiding problems in the future if you implement something like a multi-stage application process so that only those dedicated will apply. Look out for active, legitimate websites and content that aligns with your product. You should also configure your process so that approval is only granted manually.
Use affiliate plugins and program tools to keep an eye on your traffic and program analytics. Look out for a sudden surge in traffic, an influx of redirected pages or a questionable number of transactions given by a single IP address.
There are also fraud prevention tools and add-ons available, which will flag suspicious activity before you pay a risky affiliate.
If you see something you think is suspicious or unethical, it would be best to contact the site owner. As pointed out in a previous Affiliate Drive Time episode on removing affiliates, mistakes can happen, and if the suspicious activity can be explained, then you’ve avoided burning a bridge. However, if you are left unconvinced, it’s time to cut ties. If the same user is repeatedly demonstrating suspicious behaviour or is violating your terms and conditions, it’s best to remove them.
As an affiliate manager, you must learn to act quickly when you spot fraud. If you need any further assistance on this matter, don’t hesitate to book a free call with our team of experts who can point you in the right direction.