Preventing Affiliate Fraud: Best Practices and Strategies for Success
Affiliate fraud is the act of using deceitful methods to gain commissions or rewards from an affiliate program. Examples include cookie stuffing, adware or malware, fake leads or sales, click fraud, and typosquatting. To detect affiliate fraud, look for abnormal conversion rates, traffic volume, and refund rates.
Affiliate marketing is a great source for expanding your online business, making a new base of customers, and increasing your revenue. However, it also brings certain risks with it, like affiliate fraud.
Affiliate fraud is the process of gaining a commission or reward by abusing or offending an affiliate program with deceitful, dishonest, and unprincipled methods. Affiliate fraud can be able to destroy the name of your brand, throw your marketing budget down the drain, also, it can scuttle relationships with your real affiliates.
In this article, we will describe what affiliate fraud is, how to detect and prevent it. We are also going to share some best practices and strategies towards success in affiliate marketing using an example platform being Greip.
What is Affiliate Fraud?
The different ways this could manifest would be many but the underlying goal would be that of gaming the tracking mechanism of an affiliate program to create phantom or fraudulent conversions, clicks, leads or sales. A few examples of affiliate fraud are:
- Cookie stuffing: This is where an affiliate makes use of multiple cookies to enable them to place several cookies on a user's browser such that a user makes a future purchase in the merchant's site, and the affiliate can lay claim for the purchase.
- Adware or malware: This is where an affiliate installs malwares on the user's device that would take the user to the merchant website or display pop-up ads that interrupt their surfing experience.
- Fake leads or sales: This is whereby bots, identities who are stolen or even fake information to fill forms or make a purchase on the merchant website for that matter.
- Click fraud: This is when an affiliate uses bots or paid clickers to generate fake clicks on their ads or links.
- Typosquatting: That is where an affiliate registers a domain name which is close to the merchant's site, for example grelp.io instead of greip.io and he takes users who mistyped the URL either to his site or the merchant's one using their own affiliate link.
How to Detect Affiliate Fraud?
Finding out the affiliate fraud may be hard for you personally, especially when you have several affiliates and large transactions going out. However, here are a few signs as well as indicators that you can use in order to find out suspicious activity and fraudulent affiliates right from your own account. Here they do:
- Abnormally high conversion rates: If the conversion ratios of an affiliate are well higher than the average or as compared to other affiliates in the same niche, then it can be taken as a signal for fake leads or sales.
- Abnormally low conversion rates: If an affiliate has a very low conversion rate but a high number of clicks or impressions, it could be a sign of click fraud or cookie stuffing.
- Abnormally high traffic volume: If an affiliate has a sudden spike in traffic volume that does not match their usual pattern or source, it could be a sign of bot traffic or paid clickers.
- Abnormally low traffic quality: Although low-quality traffic sources would imply if an affiliate had low bounce rate, low session duration, low pages per session, or high percentage of new users, which could be a tip-off of adware or malware.
- Abnormally high refund rates: If an affiliate has a high percentage of refunds or chargebacks from their customers, it could be a sign of fake sales or unhappy customers.
- Abnormally high commission payouts: This could be an indication of inflated conversions or manipulation in tracking if there is an affiliate who has high commission payout but does not reflect its performance and the average performance of the industry.
How to Prevent Affiliate Fraud?
However, you can do a lot to prevent the same using a few proactive steps and some tools well within reach. Following are some tips and best practices to help you prevent affiliate fraud and keep your online business from getting harmed from its costly and damaging impact:
- Choose your affiliates with care: Make sure you scrutinize all the affiliates coming your way and verify their credentials, reputation, quality of website, source of traffic, and how relevant it would be to your niche. You can also use several tools such as Google Analytics or SimilarWeb so that you can verify their traffic data and behavior.
- Set rules and clear guidelines: Communicate what is acceptable and what is not in your program to them as clearly as possible. Secondly, you will also be able to provide a code of conduct or terms and conditions that will detail all the dos and don'ts. Also, you can regularly observe compliance and performance by your affiliates and where necessary take action upon notices for violations.
- Use a reliable tracking system: One of the most critical components to preventing affiliate fraud is a strong tracking system which will track and attribute conversions properly. You can track information about your affiliates and your commissions in real-time using third-party services supporting modern functionalities like cross-device tracking, multi-touch attribution, postback URLs, pixel tracking, and so on.
- Use fraud detection tools: Other than having a good tracking system, you can also make use of fraud detection tools which help you identify and block fraudulent activity and affiliates. Analyze your traffic data and detect any type of anomalies like bot traffic, click fraud, fake leads or sales through tools like Greip. You can also consider using tools like BrandVerity or AdWatcher to do a brand name or keyword search so as to identify any instances of typosquatting, trademark infringement, or ad hijacking.
- Educate your affiliates: You can also prevent affiliate fraud by educating your affiliates to the benefits of that ethical and transparent marketing practice, as well as on the risks and consequences of that fraudulent behavior. You can also offer them some training, furnish them with resources and aid in improving their skills and on the job. You can at other times reward them with bonus, commission or recognition of how great they are doing and staying faithful to your business.
Affiliate marketing is the best way to flourish your online business, but it's not out of challenges and affiliate fraud can be one of them. Affiliate fraud can damage your brand name, waste your marketing budget, and sometimes spoil your relationship with your legitimate affiliates too. However, you can prevent affiliate fraud with some proactive measures and tools.
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