Running an affiliate marketing program is an effective way to grow your business and increase sales. Unfortunately, there is also the risk of malicious activity such as affiliate fraud, which can harm your revenue and undermine your advertising initiatives.
The problem of affiliate fraud is serious and growing. However, identifying the different methods used by malicious actors and illicit partners can help you protect yourself.
In this post, we explain what affiliate fraud is and discuss some of the most common types. Then we will introduce you to three important methods that you can use to prevent this. Let’s get started!
An Introduction to Affiliate Marketing Scams: A Must-Read for Merchants
Affiliate marketing is a brilliant online advertising strategy based on a performance-based model. Brands work with partners who then promote products or services through unique links or referral codes.
If these promotions result in sales or conversions, affiliates receive a commission. This setup not only offers affiliates a Path to passive income but also serves as an efficient marketing lever for brands aiming to increase conversions and sales.
However, the affiliate marketing model is not without its flaws, especially when it comes to digital tracking and attribution. Amazingly, over a third of digital advertising traffic According to recent studies, it is characterized by fraud.
The crux of the problem lies in the exploitation of the affiliate marketing system by fraudsters who fraudulently claim commissions, thereby harming both affiliate marketers and merchants.
In simple terms, affiliate fraud occurs when malicious actors engage in or carry out illegal activities to defraud affiliate marketers or merchants. These scammers can use various methods to trick companies into paying them affiliate commissions that are not actually valid.
Decoding Affiliate Scams: What You Need to Know
Affiliate fraud comes in many different forms. The most common types include:
Click on Fraud
What it looks like: You may notice an unusual increase in clicks without a corresponding increase in conversions, or you may see a high number of clicks from suspicious or irrelevant sources.Click fraud allows fraudsters to flood pay-per-click (PPC) campaigns with fraudulent or invalid clicks, often through bots or artificial activities that use software to simulate real users.
Red flags to watch out for: Keep an eye on irregular traffic patterns, such as: B. Clicks that arrive at different times or from the same IP addresses in quick succession.
Typo
What it looks like: This refers to adopting a URL that is similar to a company’s name. Fraudsters create domain names that visually resemble those of a legitimate brand and capture misdirected traffic.
Red flags to watch out for: Be aware of domains that are very similar to your brand’s URL and use tools to alert you to new domain registrations that may be trying to divert your traffic.
Traffic diversion
Cookie filling
App installs (attribution fraud)
What it looks like: Fraudsters use stolen credit card information to perform unauthorized app installs to manipulate attribution platforms to collect commissions.
Red flags to watch out for: An increase in app installs that do not correlate with genuine user interest or conversions, or installs that come from suspicious sources, could be an indication of this type of scam.
PPC scam
What it looks like: Criminals use paid advertising to inappropriately drive traffic through affiliate links.This may include bidding on restricted branded keywords or creating ads that link directly to affiliate tracking URLs without permission.
Perpetrators use these strategies to siphon commissions from real traffic or to inflate the costs of the brand’s legitimate advertising campaigns.
Warning signs to watch out for: There are several things you should pay attention to…
Unexpected traffic sources: If your analytics show incoming traffic from paid sources like Google Ads or Bing Ads, where affiliates are typically excluded from advertising, this could be a sign of PPC fraud.
Increase in costs: A sudden increase in the cost per click (CPC) for your branded keywords may indicate that affiliates are competing for the same keywords, which is often prohibited in affiliate agreements.
Abnormal conversion patterns: If you see conversions that don’t match the typical user journey or that have unusually high or low conversion rates compared to organic affiliate traffic, this may indicate that manipulative tactics are being used.
If you engage in affiliate marketing, these types of scams can have devastating effects. As a merchant, you may be paying for clicks that don’t actually drive sales, or incurring unnecessary costs that threaten your bottom line. Additionally, affiliate partners could be unfairly blamed or penalized for black hat behavior by fraudsters.
Affiliate Fraud: 4 Ways to Prevent It
Now that we have a better understanding of what exactly affiliate fraud is and the different forms it can take, it’s time to learn how to avoid it. Let’s take a look at 4 effective methods you can use to prevent affiliate fraud.
1. Check your partners carefully and communicate with them
Implementing a strategic verification process to ensure affiliates are legitimate from the start can go a long way toward preventing fraud. For example, you might consider implementing a multi-step application process and configuring it so that you have to manually approve new partners:
When reviewing a potential partner, you want to make sure that they have an active, legitimate website and that their content is consistent with your products or services. This can reduce the risk of a malicious actor infiltrating undetected.
Even if you have agreed to a partner, it is important to clearly communicate your terms and conditions. Having an attorney review your policies can help ensure there is no room for error or potential loopholes that could lead to fraud or partner abuse.
2. Closely monitor traffic and program analysis
It’s hard to detect illegal or suspicious activity in your affiliate program if you don’t have the ability to actively monitor it.
By regularly and closely tracking your affiliate marketing analytics, you will be better able to detect a sudden spike in traffic, a worrisome influx of redirect pages, or a questionable number of transactions associated with a single IP address.
Luckily, there are affiliate program tools and plugins that can make this easier. For example, our drift kings media plugin offers a robust admin dashboard with link tracking, analytics and reporting features so you can easily uncover anomalies:
Additionally, since this solution integrates seamlessly with WordPress, you don’t have to worry about dealing with multiple platforms and tools. All the insights you need are available to you via your dashboard.
For PPC fraud, you can use drift kings media in conjunction with Google Analytics to detect fraudulent behavior. drift kings media automatically adds UTM parameters to track the sources of PPC clicks and identify bad actors.
By monitoring these metrics, you stay in control of your affiliate marketing spend and ensure your investment results in real, profitable engagement.
For more information and details on how to analyze GA4 for warning signs, check out our dedicated PPC affiliate fraud detection blog.
3. Block suspicious IP addresses and remove unethical partners
Mistakes happen, and not all strange behavior or anomalies that occur within your affiliate program necessarily mean that you are dealing with a cybercriminal. However, it’s best to err on the side of caution.
If the same user repeatedly exhibits suspicious behavior or violates your terms of service, it’s probably best to remove them.
You don’t want to risk jeopardizing your entire affiliate program or losing profits due to a careless, malicious or greedy participant.
If you are an drift kings media user, you can easily do this directly from the plugin. There is a dedicated section for your affiliate list. Removing an affiliate partner is as easy as checking the “Block Affiliate” box.
You can also use the plugin’s settings to take advantage of a variety of other important features.
For example, you can disable the option to automatically add users and enable a setting to view your partner agreement. There is even a feature to change the number of days before an affiliate cookie expires. This can help prevent the fraudulent technique we discussed earlier known as “cookie filling”.
4. Use a fraud prevention platform
drift kings media includes a fraud prevention add-on that flags suspicious activity before you make a withdrawal. The biggest advantage is that you don’t have to re-guess every single commission you send. Instead, you get peace of mind.
Diploma
Affiliate marketing is a popular, powerful and effective way to grow your business, promote products and increase sales. However, it is important to take careful and proactive measures to protect your program and campaigns from fraudsters.
In this post, we discussed three ways to prevent affiliate fraud:
Check your partners carefully and communicate with them.
Closely monitor your affiliate program’s analytics and user behavior.
Block suspicious IP addresses and remove unethical partners.
Do you have questions about affiliate marketing fraud prevention? Let us know in the comments section below!
A digital marketing agency successfully reduced affiliate fraud by 30% by adopting a comprehensive monitoring system. They used analytics tools to track click patterns and identified anomalies early, allowing them to take action against fraudulent affiliates before significant losses occurred.
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