The Hidden Cost of Affiliate Fraud

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There’s at least one bad apple in every industry. In affiliate marketing, it’s affiliate fraud. The industry has come leaps and bounds since its inception. In just the last few years, affiliate marketing has gone through a boom that shows no signs of slowing. However, with this growth has unfortunately come the opportunity to exploit it. Traffic and affiliate fraud remain a constant challenge for businesses and affiliate managers.?

However, affiliate fraud is not an unbeatable foe threatening to take down the industry. By continuously bringing attention to affiliate fraud - how to spot it and ways to beat it - the industry can continue to thrive. In today’s newsletter, I will highlight the most common types of affiliate fraud to watch out for and how you can safeguard your business or affiliate program.

Types of Affiliate Fraud

Affiliate fraud can cost you money, marketing data and your reputation. Its impact on profit margins will have negative impacts on your affiliate relationships and ROI. Just like most things, it’s better to know how to deal with affiliate fraud before it ever happens. The first step in that is being able to identify it.

Click Fraud: This is the most common type of affiliate fraud. It involves the use of automated bots or ‘human click farms’ to artificially inflate clicks. Click fraud can have a huge impact on budgets and campaign metrics by providing false data.

Lead Fraud: Lead generation campaigns are crucial for attracting potential customers and guiding them through the sales process. Affiliate fraud occurs when fraudsters submit fake or low-quality leads to earn commissions.

Cookie Stuffing: Cookies are an extremely helpful tool in affiliate marketing since they help affiliates track activity and attribute sales. Unfortunately, the usefulness of cookies can be exploited and put fraudulently on users’ devices to claim commissions for sales affiliates didn’t influence.

Incentivised Traffic: A recent crackdown on fake reviews has brought attention to incentivised traffic. Without the advertiser’s approval, some affiliates will offer rewards for clicks and actions that are not legitimate. This results in low-quality traffic and conversations.

Proxy Traffic: Affiliate marketing is a global industry, so international traffic is a given. The exploitation of this comes from using VPNs or proxies to generate fake international traffic to manipulate geo-targeting efforts.

Type Squatting: Clear and relevant domain names are important to direct traffic to the right place. However, just one letter difference could lead an audience to somewhere else entirely. Type squatting is when misplaced domain names that resemble legitimate websites are registered to divert traffic.

As I’ve already said, preventing these fraudulent tactics is the most effective strategy for beating them. Knowing what to look out for is about being reactive, spotting the problem and putting a stop to it before it becomes a long-term issue. Now, we need to explore the preventative measures you can take to hopefully stop the need for this.

Stop affiliate fraud before it happens

1. Be selective of the affiliate networks you choose. It’s best to partner with one that has a proven track record of combating fraud. Don’t be afraid to ask questions about how they recruit and onboard.

1. Comb through the network’s terms and conditions. You can usually find these on the network’s website. Check out what they are asking affiliates to adhere to and ensure it aligns with your program and best practices.

1. Be clear with your affiliates about the guidelines they must follow, including acceptable traffic sources, promotional methods and performance expectations.

1. Monitor affiliate activities closely. Robust tracking and reporting systems will detect traffic by individual publishers as well as by traffic source.

1. Conduct regular audits to keep on top of affiliate activities and websites. It will also help you keep an eye on their daily performance to spot any suspicious patterns or data anomalies.

Affiliate fraud is out there but it doesn’t have to impact your business. Remain vigilant, put the protective measures in place and stay up to date with the latest affiliate fraud updates.

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