Affiliate fraud is an ever-evolving problem affecting digital marketers. While affiliate marketing is an excellent way to develop a revenue stream, malicious affiliates can take advantage of your endeavors. Affiliate fraud occurs when a nefarious affiliate marketer fakes an action to receive a commission.
In affiliate marketing, the marketing teams pay affiliates a commission for every action. Affiliate marketing is an integral part of the performance marketing industry. It is an effective model for marketing teams since they pay only when the campaign performs.
Affiliate traps can severely affect the performance of your company’s affiliate network. Malicious affiliates rely on bots or manual methods for faking actions. Nowadays, nefarious affiliates use advanced bots that mimic human behavior. Here are some essential aspects to know about affiliate frauds.
Things to know about Affiliate Fraud
Affiliate fraud is a type of ad fraud that involves unfair means to collect commissions fraudulently. Marketing teams and affiliate marketers often rely on stringent ways to address affiliate fraud. Nefarious affiliates leverage redirecting junk traffic to your website to get rewards.
It is also common among threat actors to use bots to create affiliate fraud. With all-inclusive affiliate fraud detection, companies can easily recognize the deceiving practices of malicious affiliates.
Methods Malicious Affiliates use to create Affiliate Fraud
Automation of processes in affiliate marketing is one of the major reasons behind its burgeoning popularity. By adopting affiliate marketing, companies can save the time and effort of their marketing teams. But the lack of direct human involvement offers a threat to actors about the opportunity to create frauds. Here are some methods nefarious affiliates use for affiliate frauds.
Wise use of Spyware
Users unknowingly download spyware and other adware programs. Spyware can severely compromise the security of the devices of the users. It can insert code secretly onto the users’ devices. Spyware can artificially inflate traffic figures, thereby resulting in fake commissions.
Domain Squatting
Malicious affiliates also rely on official-looking domains with URLs similar to reputed retailers. Users click on these links and get redirected to the original website. During redirect, the cookie used by malicious affiliates snags the referral.
Cookie Stuffing
In cookie stuffing, nefarious affiliates place cookies on the devices of the users. It allows the malicious affiliate to earn a commission irrespective of the actions of the user. Cookie stuffing can severely impact your company’s affiliate marketing efforts.
Spoofing of IPs
Nefarious affiliates often fake the IP addresses to hide the identity of the users. Affiliate marketers with bad intentions secretly click links on their own websites to increase traffic artificially.
How bad can Affiliate Fraud get?
Malicious affiliates can even make fraudulent purchases with the merchant by using stolen credit cards to earn higher commissions. A nefarious affiliate can significantly damage a merchant’s brand image and reputation.
The actions of malicious affiliates can establish misconceptions and set false expectations of the brand. These misconceptions and false expectations can travel across social media and other online platforms. Here are some ways affiliate marketing scams can adversely affect marketing teams.
Low Return on Investment
Malicious affiliates may severely affect your marketing team’s return on investment. They will provide fake leads that will not convert into real users. This lowers your lead-to-customer conversion rate. The amount of business generated per dollar spent also suffers a setback.
Erodes the Trust of Legitimate Affiliates
Malicious affiliates can severely erode the trust of your company’s legitimate affiliate network. In the presence of affiliate fraud, you end up paying the fraudster rather than the legitimate affiliate.
Trustworthy affiliates may become frustrated when you don’t compensate them for the leads they generate. Scams and frauds associated with affiliate marketing can result in loss of marketing performance. Companies also report wasted ad-spend during affiliate frauds.
Negative Publicity
Affiliate scams and frauds can hurt the publicity of your company. Malicious affiliates send automatically generated marketing messages that can make your customers complain about you. It gives the impression that your company is willing to force sales by relying on stolen information.
Regulators and law enforcement agencies can also impose fines that may lead to other complications. Maintaining affiliate marketing compliance is thus necessary to safeguard your brand’s reputation.
The Threat of Affiliate Fraud is real.
Affiliate fraud is an insidious way of stealing revenue from your program. It comprises methods that manipulate your entire affiliate program.
Malicious affiliates' primary objective is to siphon legitimate affiliates' income. Marketing teams should carefully consider the risk factors when entering any affiliate network. Threats related to affiliates can affect your brand’s image severely.
How can you prevent Affiliate Fraud and Scams with Virus Positive Technologies?
VPT will help you to identify risks associated with affiliate frauds. VPT has a dedicated and advanced fraud detection platform that can assist you in recognizing nefarious affiliates. Prevent common affiliate frauds and secure your network with a VPT.
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