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Affiliate marketing is a booming industry, with projected spend expected to reach $16 billion in 2024. Over 80% of marketers utilize affiliate marketing, which generates up to 30% of sales. The average affiliate marketer earns around $8,000 per month. However, with the growth of affiliate marketing comes an increase in affiliate marketing fraud. In 2023, advertisers lost a staggering $125 billion to ad fraud, and affiliate marketing is the second-highest source of ad fraud. On average, 45% of traffic generated through affiliate marketing is fraudulent.
Plus 3 Questions Ad Fraud Solutions Need To Answer
With these alarming statistics in mind, it’s important to address some key questions. How does affiliate marketing fraud occur? Who does it affect? And, most importantly, what can be done to combat it?
Plus 3 Questions Ad Fraud Solutions Need To Answer
How Does Affiliate Marketing Fraud Work?
Affiliate marketing fraud can occur in various ways, but two common methods are affiliate hijacking and influencer marketing fraud.
Plus 3 Questions Ad Fraud Solutions Need To Answer
Affiliate Hijacking: This involves fraudsters using search engine optimization tactics to redirect traffic, misuse affiliate cookies, or clone legitimate affiliate websites. By redirecting visitors from counterfeit pages to authentic websites, fraudsters can claim credit for organic traffic that would have naturally reached the legitimate site. Affiliate hijackers often create URLs that mimic the genuine website URLs, using slight variations or intentional misspellings.
Plus 3 Questions Ad Fraud Solutions Need To Answer
Influencer Marketing Fraud: Influencer marketing involves partnering with individuals who have a significant social following to promote products or services. However, fraud can occur when influencers artificially inflate their engagement using bots or other techniques. Advertisers may end up paying for little to no conversions while losing out on potential sales.
Plus 3 Questions Ad Fraud Solutions Need To Answer
How Can Businesses Protect Themselves from Fraudulent Affiliates?
To protect your business from fraudulent affiliates, it’s essential to thoroughly vet prospective affiliate marketing partners. Meeting them in person or having a video call can help establish trust and ensure they are genuine. Conducting an online background check by examining their social media profiles and verifying profile photos can provide further assurance.
Plus 3 Questions Ad Fraud Solutions Need To Answer
Once you’ve established the legitimacy of an affiliate, discuss fraud prevention measures with them. Ask about their processes for identifying and stopping invalid traffic, and whether they use tools capable of detecting sophisticated invalid traffic (SIVT). It’s crucial for both parties to have systems in place to protect campaigns, budgets, and commissions.
If any answers or behaviors raise concerns, it’s best to move on to another affiliate or affiliate network.
What Else Can Be Done to Prevent Affiliate Marketing Scams?
Affiliate marketing fraud can affect businesses of all sizes, including legitimate ones that have undergone thorough vetting. Fraudsters are becoming increasingly sophisticated and quick to adopt innovative technology. Implementing an ad fraud solution can provide an extra layer of security against fraud.
When choosing an ad fraud solution, consider these three important questions:
Do you check incoming traffic in real-time? Time is of the essence when it comes to ad fraud. Delaying the review of web traffic gives fraudsters an opportunity to act and get paid while potentially diverting payment to honest affiliates.
Do you check multiple data points? Simply verifying an IP address is not sufficient. A comprehensive ad fraud solution should analyze numerous data points to detect and stop invalid traffic while also verifying real visitors. This ensures advertisers don’t miss out on conversions and affiliates receive rightful commissions.
Do you show your work? Some ad fraud solutions provide little to no data to support their identification of fraudulent activity. It’s important to have access to all the data behind the decision to flag fraudulent activity. This enables businesses to address the root of the problem with the affiliate or determine if the issue lies with the affiliate themselves.
By choosing an ad fraud solution that is fast, accurate, thorough, and data-driven, businesses can effectively combat affiliate marketing fraud.
In conclusion, affiliate marketing fraud is a significant issue that businesses must address. By understanding how fraud occurs, thoroughly vetting affiliates, and implementing ad fraud solutions, businesses can protect their budgets, reputations, and affiliate partnerships.