Proactive vs Reactive: Finding the Right Approach to Getting Affiliate Ad Fraud Under Control
For many business-to-consumer (B2C) brands, an affiliate marketing program is a low-cost, high-reward marketing technique. It involves a third party selling a business’s products or services, and every time a sale is made by the third party, they earn a commission.
It’s a smart strategy, as according to a report from Influencer Marketing Hub, more than 90% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement. However, the enticement of additional profit can often temp affiliate partners to perpetuate or allow invalid activity to occur to drive up their sales and take a higher commission, also known as affiliate ad fraud.
Brands have a number of ways available to combat affiliate ad fraud, protect their budgets and strengthen their affiliate program, including both reactive and proactive approaches.
The Tactics and Techniques to Getting Affiliate Ad Fraud Under Control
When it comes to affiliate ad fraud, there’s a wide range of techniques fraudsters are using to commit it, which is why it’s so difficult for businesses to manually detect and tackle it. However, it is important for brands to have some understanding of what they’re facing to best identify how it should be addressed.
There are affiliate scams in every customer-facing industry, and as they evolve in sophistication and become harder to recognize, the threat only becomes greater. Some of the tactics and techniques include:
- Click Fraud – Many affiliate programs set up to get a potential buyer onto their website to make a purchase operate on a cost-per-click model. This is when the affiliate partner is paid every time a shopper clicks on a certain ad or link that takes them to the website. Click fraud techniques can range from partners clicking on the link themselves to employing click farms or malware to spawn bot traffic and produce invalid clicks.
- Cookie Stuffing – One of the most common affiliate fraud techniques, cookie stuffing involves an affiliate partner adding a third-party cookie onto a user’s device or browser. When the user subsequently visits a brand’s own website and makes a purchase, the affiliate that placed the cookie gets paid a commission, despite not being directly involved in the buyer’s journey.
- URL Hijacking – This is when fraudulent affiliates purchase a domain name similar to the brand’s own. They aim to lull customers into either making a purchase through their site or redirect them straight to the brand’s site to receive a commission. However, as these customers were under the impression they were visiting your original site, the affiliate has provided no additional value.
Affiliate ad fraud scams are much more common than many businesses would expect and many are being impacted by affiliate fraud without even being aware that it is part of their affiliate traffic.
It leads to businesses chasing invalid sales leads and wasting time manually attributing commissions and reconciling invoices which can be a big hit to margins. Additionally, because many brands rely on the data sent to them by affiliates, it’s difficult to form an accurate understanding of how much advertising budget is being stolen.
It’s also important to note that sometimes, the affiliate partner may not be aware they are being impacted by ad fraud, often from their sub-partners and sub-networks, and don’t feel well equipped to be able to deal with it, allowing it to fly under the radar. That’s why it’s critical for brands to take their own steps to remove the problem, instead of just relying on partners to be trustworthy.
Choosing the Right Approach
Like all cybersecurity defenses, a brand’s chosen reaction to ad fraud can fall into two categories: reactive and proactive.
A reactive strategy aims to remedy the consequences of ad fraud after a business has experienced them. This includes manually monitoring your traffic in more depth or using third-party detection software and removing any affiliates that are proven to be committing or enabling ad fraud from your program.
It’s the go-to strategy for many SMBs, as they may feel that they’re not equipped to invest in a proactive strategy. However, this can easily turn into a difficult cycle of an unfunded anti-fraud strategy reducing the number of sales made when their funnel is filled with bots. Not to mention the manual strain of weeding bad affiliates out that smaller businesses can definitely do without.
A proactive strategy is a long-term investment that unlocks budget from the outset. The first step in this strategy is to review your terms and conditions for affiliate partners and ensure that it includes an anti-fraud policy. This will help to exclude fraud as it closes the loopholes new and existing partners may exploit.
However, the most comprehensive proactive approach to addressing affiliate ad fraud is an automated, software-based solution. This is because it safeguards your brand in two main ways. Firstly, it protects your marketing spend as it prevents invalid traffic from being included in conversion attribution which means you’re not working with meaningless engagement.
It also protects the integrity of your affiliate programs because it enables you to identify the affiliate partners sending most of the invalid traffic. With this information, you can make better-informed decisions about which sources to keep working with, and which you no longer want to engage with. It can also help you re-evaluate the rates you pay affiliates, as you get a fuller understanding of how much valuable traffic is actually being delivered.
A Growing Affiliate Landscape
With social platforms continuing to dominate the online landscape and creating new marketing channels for individuals, affiliate marketing will only grow in popularity. However, with this will come fraudulent conversions and frustrating discrepancies that end up being time-consuming and costly.
A hot topic in cybersecurity already, the reactive vs proactive debate extends over to ad fraud too. While reactive measures can rectify some of the impacts, preventative fraud management is the way forward to establishing an affiliate program that’s free from fraudsters.
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