Affiliate Fraud – The Catastrophic Facet Of Affiliate Marketing

By Author: Selins Jesse
Total Articles: 20
Comment this article

Affiliate marketing has become a mainstay of digital advertising channels, and it's a lucrative and self-sustaining way to grow brand awareness and attract more prospects. Despite its potential benefits, affiliate marketing has some risks.

Where there's an opportunity to generate revenue, there are nefarious individuals seeking to take complete advantage of unsuspicious companies and marketers to steal ad revenue. They are fraudsters, and in this affiliate marketing universe, affiliate fraud is a potential threat, impacting stakeholders simultaneously.

The Prime Objective of Affiliate Fraud
Fraudsters deploy numerous strategies to trick advertisers into paying some unearned commissions. Paying unearned commissions can be one reason to fight back against affiliate traps that destroy a customer's journey & steal advertisers' ROI. The threats, nonetheless, go far beyond unearned commissions.

Affiliate fraud falls into one of the camps –
Either a fraudster uses deceptive methodologies to convince the cardholder to ...
... make a purchase.
Or they use stolen information and submit fake transactions.
In either of these cases, a cardholder files the chargeback and recoups the lost funds.

When the fraud gets discovered, the affiliate disappears by having the commission check cashed. The incapability of preventing affiliate fraud leaves a merchant holding the bag for the commission, lost service or product, and chargeback fees.

The merchant's reputation with clients and banks is hit with the increase in the chargeback ratio. That potentially drives the processing rates higher or may shut down the processing ability.

Affiliate Fraud: Understanding Its Repercussions
Affiliate fraud is an emerging threat affecting digital advertisers. It occurs when affiliates knowingly misrepresent the role in driving sales to generate commissions, which otherwise they wouldn't qualify for.

People are more online now (ever since the pandemic), which has triggered a shift to the remote working environment. That resulted in the spike in these eCommerce activities. Affiliate marketing fraud steams the money out of an organization's marketing budgets, putting them in a fraudster's pocket without generating real business.

Whenever an e-commerce company anticipates these threats, it can hire a company that offers affiliate marketing compliance monitoring solutions to safeguard affiliate networks and ensure they are free from fraud. Otherwise, businesses will experience these consequences:

#1 A Business Loses Confidence in Their Affiliate Marketing Tactics
Affiliate fraud affects confidence in the marketing channel's performance, thereby affecting both advertisers and publishers. In addition, fraud tarnishes the overall affiliate industry's reputation. It may also cause advertisers to keep away from the potentially effective marketing channel. In general, it harms legitimate publishers experiencing reduced revenue and PR issues that they did not create.

#2 Losses of Productivity and Wasted Time
A salesforce that chases fake leads is a wasteful attempt. It can also be detrimental to the revenue goals. Besides, dealing with the fraudulent conversions, clawbacks, discrepancies, and chargebacks caused by affiliate frauds might be a time-consuming and frustrating activity for managers and staff. It even consumes hours that otherwise would have got spent in productive areas like implementing strategies to generate sales.

#3 Erroneous Strategies Because of Poor Metrics & Skewed Data
The number of leads, clicks, and installs generated from the campaign may affect an advertiser's direction during the subsequent campaigns. Affiliate fraud will speedily add fake conversion data into the campaign analysis. That results in skewed consequences. Tainted information might derail future campaigns. What it does is cause the marketer to allocate attention and funds to the market's wrong or insignificant area.

Categorizing the Affiliate Fraud Sorts: What to Learn?
With the emergence of technology that tracks and exposes innovative techniques, the market devalues traffic for sales and quantifiable actions. Affiliates get paid when the item gets added to the shopping cart or registration is over. Fraud remains the basic problem. If you have no idea of the categories of affiliate frauds, let's read through the bullet points in brief.

Cookie stuffing visitors to the website when the visitor purchases something for unrelated reasons
Typosquatting and URL hijacking
Getting individuals to download spyware or adware that can insert affiliate code
Cloning different affiliate website's content & stealing traffic
Buying Google AdWords on search terms where a company or products get ranked

Affiliate fraud is an unfortunate and catastrophic aspect of affiliate marketing. But with the advent of online marketing approaches, these frauds have become more sophisticated. Today, fraudulent activities associated with early affiliate programs get paid for clicks and traffic.
These include auto-refreshing a webpage, using software, or spamming mail from referral links. In addition, pop-ups have also become a popular unscrupulous affiliate activity.

Leverage Affiliate Fraud Protection Solutions
With the aforementioned affiliate fraud threats, companies are forced to hire an affiliate fraud detection team to eliminate the potential brand-damaging impacts. So, if your business needs affiliate fraud protection solutions, Virus Positive Technologies is a pioneer in facilitating your eCommerce enterprise. The deft team of experts at VPT implements suitable methodologies to foresee & eliminate fraud.