How to Avoid Affiliate Marketing Fraud

According to a new Juniper Research study, advertisers lost approximately $42 billion in ad budget in 2019 due to fraudulent activities committed via online, mobile, and in-app advertising. This represents a 20% increase over the $35 billion lost to advertising fraud in 2018. This upward trend is especially impressive when we consider that the loss from ad fraud in 2017 was only $3.9 billion.

These losses consume a sizable portion of the digital advertising budget. And, according to WARC data, compared to nearly $560 billion spent on digital advertising globally in 2018, the increase is expected to be at least 13% by 2022. The industry is becoming even more appealing to fraudsters as a result of budget growth. As a result, affiliate marketers are concerned that more sophisticated fraudulent methods will emerge. As a result, affiliate marketers begin to pay close attention to the affiliate fraud issue and seek the most reliable solutions for combating fraud.

What can affiliate managers do to protect themselves from fraud?

When conducting business online, it is impossible to avoid fraud. As a result, in order to succeed in this business, you must take precautions to protect your company and clients from fraudsters. First and foremost, it entails comprehending the nature of affiliate marketing fraud and devising strategies to combat it.

The approach is similar to the general internet security rules that all users should follow if they do not want to jeopardise their data. The same is true for affiliate program managers: in order to ensure a reliable platform with high-quality and fraud-free traffic, you must regularly perform precautionary routine actions.

You should adhere to the following best practices:

New affiliates must be thoroughly validated.

It is always easier to avoid potential losses than to clean up afterward. As a result, exercise caution when adding new affiliates. It may take time to check each individual, but it is worthwhile to prioritize. As of now, you can avoid any further losses. Examine their websites, brand alignment with your program, and relevant content profiles on social media and other portals. If you notice any discrepancy, this is an early warning sign.

Data verification and analysis

Data can reveal a lot. Ad campaign performance should be monitored for unusual changes; it cannot suddenly skyrocket. The following pointers can assist you in avoiding affiliate fraud.

Keep track of information from referring sites and URLs.

Valid URLs indicate the trustworthiness of affiliate sites. Similarly, referring URLs can identify suspicious sites and direct affiliate managers to investigate their legitimacy.

Monitor IP addresses

Multiple transactions received from the same IP address should raise suspicions and necessitate immediate verification.

Keep an eye out for sub-affiliate networks.

This is a critical point, and one over which you have less control, because networks may quickly add hundreds of affiliates without thoroughly checking their legitimacy.

Keep an eye on the growth of metrics.

Increase your focus on metrics that require human intervention, such as inquiries, conversions, and purchases. If you notice sudden increases in traffic and affiliate-referred transactions. If there is some, fraud has most likely occurred, and you must intervene.

Prompt action against fraud

To begin, ensure that you are fully legally compliant to avoid being caught in a loophole. Revisit and update the program terms and conditions on a regular basis. Next, don't be afraid to take action against affiliate fraud in any form. Take whatever action you deem appropriate in each case, from sending affiliates violation warnings to terminating them from the program.

These are the recommendations that must be followed. Even so, they cannot guarantee complete protection against affiliate fraud. You can occasionally identify and block suspicious affiliates, but it's difficult to always be on the lookout for fraud. The likelihood of missing something is relatively high.

Fraudsters are very skilled at developing robust fraud strategies. Once one of their strategies is identified and countered, they will devise a new scheme to circumvent your protection safety measures.

You should use a professional help-fraud protection tool to ensure complete protection. Fraud-fighting tools are designed to make it easier to analyze your reports and activity logs in advance of any potential fraud. It will provide you with a real-time report on sudden traffic surges, rapid growth in specific affiliate referred sales or leads, and any suspicious activity.

Typical fraud prevention features on tracking platforms include: -Click-level fraud prevention - a tool that reduces fraudulent traffic by filtering VPN, non-earmarked traffic from proxies, bot traffic, and so on.

-Automation of CR. The CR automation feature acts as a regulator of the basic traffic quality index in the fraud prevention function. A low CR percentage indicates poor traffic quality, whereas a high CR percentage indicates the presence of fraudulent traffic. By using the CR percentage, you can immediately decline traffic that does not match the advertiser's preferences.

-Rejection of duplicate IP addresses. Conversions with duplicate IP addresses are a dead giveaway that you're dealing with low-quality or fraudulent traffic. During the offer setup phase, select "Unique IP only" to ensure that only conversions with unique IP are approved.

-Extensive statistics. The significance of a tracking platform that provides detailed statistics is obvious. Aside from its primary goal, it also aids in the identification and blocking of fraudulent conversion patterns. For example, when analysing campaign performance, you may notice that the browser language differs from the country of conversion; or there are an unusually high number of impressions but no conversions. It is simple to detect these signals and block fraudsters using a number of data slices.

-Click to view the conversion time report. There is a time frame for each conversion type in which the majority of clicks and installs occur. High volumes of traffic outside of this time frame are usually the result of affiliate fraud. CTT reports are used to detect and prevent mobile ad fraud, such as click injection and click spamming.

These were illustrative cases based on the functionality of Affise affiliate marketing platforms; however, fraud prevention tools may differ between platforms. There are two additional popular choices in addition to the features offered by the platforms. To combat affiliate fraud, you can either create your own tool in-house or use pre-made platforms. There are benefits and peculiarities to each choice.

There is a prevailing belief that because internal solutions are created for particular business requirements, they are always superior. Additional users feel safer when it comes to data privacy. While there are respectable alternatives already on the market, it is also well known that it is significantly more expensive and that its development takes a lot longer.

Would you like to compare in-house and SaaS fraud prevention products in depth? Take a close look at the advantages and disadvantages of both in the eBook "Performance Marketing Fraud."