Many consumer companies are diversifying their sales channels to meet market demands for digitization. Retail companies in particular need to look beyond their brick-and-mortar stores by expanding across multiple channels.
Affiliate marketing is becoming an increasingly important part of this digital diversification.
This strategy allows brands to partner with social influencers to reach large audiences with minimal resources and generate quick results. However, affiliate marketing strategies are a target for fraudulent activities.
Companies think they are paying the right affiliate partners, but there is a huge risk that they are funneling funds to fraudulent sources.
In the current digital growth landscape, it is essential to tackle ad fraud and cultivate genuine affiliates.
understand the threat
Affiliate marketing fraud can occur when a website or individual who is paid a commission to promote a product or service uses deceptive tactics to generate revenue for personal gain . In most cases, affiliates are aware of the fraud, but are unequipped to overcome it, so they turn a blind eye or even perpetuate it.
The e-commerce sector is one of the most vulnerable targets for affiliate fraud.Retail e-commerce sales are approx. $8.1 trillion by 2026, targeting mobile and online users to increase sales is extremely valuable for businesses. Many retail companies partner with various social media influencers who provide affiliate links.
Unfortunately, this growth opportunity is not only attractive for the industry itself, but also for bad actors looking to steal millions of dollars each year.
To break it down, common scam techniques include:
Cookie filling: This includes fraudulent affiliates tricking you into thinking they are sending traffic to your website by dropping third-party cookies on visitors' web browsers without your knowledge. Cookies contain false information and can cause deceived companies to mistakenly believe engagements are not coming from a valid partner.
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Keyword bidding: Affiliates use their own funds to create ads, display them in front of consumers, and receive a commission. This allows the affiliate partner to occupy the space of the original brand. In that case, the brand has to pay the affiliate for the purchase even though it loses engagement on its own site.
Extension threats: Scammers are becoming increasingly sophisticated, masquerading as legitimate browser extensions and injecting massive clicks seconds before a purchase to earn fraudulent rewards for referrals.
Stop campaign performance degradation
Fraud can make campaigns unreliable, inefficient, and costly for businesses. With threats growing and budgets at stake, advertisers can potentially lose control over managing their affiliates. By understanding these techniques behind fraud, companies are one step closer to discovering it and unlocking its potential.
Introducing a more comprehensive vetting process for potential affiliate partners is a good way for advertisers to protect themselves. For example, ensuring that your partner's email address matches her website URL is a fundamental and important way to verify your partner's identity and ensure transparency.
Outlining a zero-tolerance policy for fraud in your terms of service can also help provide some protection. Finally, simple tactics like shortening affiliate link URLs can make tracking more manageable and hide the unique ID each affiliate uses to protect against commission loss.
growth opportunity
Affiliate programs are essential to advertiser growth. However, the global affiliate marketing platform market is $36.9 million by 2030fraud is an issue that cannot be ignored.
If advertisers put the right tools in place to protect their advertising efforts, fraudsters can't win. With the right defenses, affiliates get accurate commissions, advertisers sell more products, and consumers can easily buy the products they want.
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