How to turn the transparent tide on affiliate fraud?

Picture yourself going on a treasure hunt across the sea. You're aiming for a treasure island, but you meet pirates along the way. These pirates pretend to be friends, offering to help you, but their real plan is to mislead you for their benefit.

What’s worse? Imagine having some friends on this journey to protect you from these pirates but they fail to tell you the direction from where they are coming or provide the necessary information for which they were taken along on this journey

This is how affiliate fraud works while having a black-box ad fraud mitigation solution in place. You feel secure but are not secured.?

Affiliate marketing is a booming industry worth $17 billion as of 2023—and brands using this channel see an incredible return on investment (ROI). While this presents a huge opportunity for brands to rely on this technique for better results, 17% of affiliate traffic resulted from fraudulent clicks in 2022. This puts on the table a rather concerning situation of mindful investment surrounded by a looming threat.?

It’s high time this issue is looked into at a deeper level.?

What is affiliate fraud?

Quite similar to attribution fraud but with a wider perspective, affiliate fraud occurs when fraudsters claim credit for a commission payout in an affiliate marketing campaign through fake attributions and generating fake leads. Since the only payout model in affiliate fraud is for affiliates, the bad actors disguise themselves as genuine affiliates escaping the strict vigilance of advertisers who are on the lookout for such partners to generate quick results.?

How does affiliate fraud take place?

Affiliate fraud can don many disguises, each designed to outsmart traditional detection methods and exploit loopholes in affiliate marketing campaigns. Let's unravel some of these deceptive tactics:

1. Fake leads: Imagine casting a net to catch fish, only to pull it up filled with nothing but seaweed. Similarly, fraudsters generate fake sign-ups or sales to earn commissions. They create bots or hire individuals to mimic genuine customer actions without any real intent to purchase or engage with the product.
2. Cookie Stuffing: This tactic involves stuffing a user's computer with cookies from various affiliate programs without their knowledge. It's akin to sneaking aboard a ship and secretly planting your flag, claiming a share of the treasure for every piece of cargo, regardless of your contribution.
3. Adware and Spyware: Some affiliates resort to using adware or spyware to redirect users’ traffic to their links or to replace existing affiliate cookies. This is like a pirate redirecting a merchant ship to their port or repainting a ship’s sails to claim its bounty.
4. Typosquatting: Here, fraudsters register domains that closely resemble those of legitimate brands but contain typos. Unsuspecting visitors think they're engaging with the real brand, but any action they take benefits the impersonator. It's the digital equivalent of following a map to the wrong island, where pirates await, not treasure.

Consequences of Affiliate Fraud?

The ramifications of affiliate fraud extend far beyond the immediate financial loss. Its ripple effect can tarnish the reputation and potential of advertisers and publishers, highlighting the need for unyielding vigilance.

1. Financial drain: Advertisers bleed budgets on fraudulent interactions, hampering ROI and diluting the effectiveness of campaigns.
2. Credibility erosion: As ads appear on unscrupulous websites due to fraud, the reputation of both advertisers and publishers suffers. Moreover, publishers whose inventories are the most susceptible to attracting such fake affiliates are disregarded which affects future partnerships on premium digital marketing campaigns?
3. Resource wastage: Valuable time and resources are squandered in analysing false data. This diverts the focus of the advertising team from genuine growth strategies which has a direct impact on the marketing calendar of the organization
4. Loss of trust: Users' trust erodes as they encounter irrelevant or misleading ads, adversely affecting engagement and conversions.
5. Ad network relations: Affiliate fraud can strain relationships with ad networks, potentially leading to exclusion from premium opportunities. This is widely observed in the case of advertisers who are willing to pay premium prices to serve their ads to the most appropriate target audience which also increases their susceptibility to such affiliate attacks.

How to deal with the challenges arising out of affiliate fraud?

1. Vigilant screening: The first step is to control the excitement and scrutinize potential affiliates thoroughly before onboarding, examining their history, methods, and online presence. It is also important to craft clear and comprehensive contracts that outline expectations, actions against fraud, and consequences for breach.
2. Real-time monitoring: Investing in cutting-edge fraud detection tools can flag anomalies in real-time, enabling swift intervention. Moreover, with brands like ClearTrust, you get the benefit of taking a 7-day free trial, seamless integration and real-time reporting that assists in faster decision-making.
3. Validating conversion: The best gift for a fraudster is a lack of validation process for the leads generated or attributions credited. To tackle the same, it is important to implement multi-step validation processes for conversions, ensuring each interaction meets predefined criteria. This helps in verifying the conversions as genuine and accordingly triggering a subsequent action
4. Adopt attribution models: It is also advisable to employ advanced attribution models to allocate credit accurately, thwarting attempts at fraudulent attribution

In conclusion, affiliate fraud is a formidable adversary, but not an invincible one. With the right strategies and tools at our disposal, we can protect our investments and foster a healthier, more transparent affiliate marketing ecosystem.