The top 5 affiliate fraud indicators
2020 is certainly a year full of uncertainty, however, affiliate marketing is definitely on the rise. Digital marketers only need to take a brief look at this years’ statistics:
- According to Business Insider, 15% of the total digital advertising revenue is attributed to affiliate marketing
- Web Market Support stated that 81% of brands and 84% of publishers have already adopted affiliate marketing as an integral part of their digital strategy
- Even Rakuten’s numbers confirm that 79% of marketers rely on affiliate channels to boost their digital conversion rates
Naturally, advanced marketers favor affiliate marketing because of its low cost and potential for scalability. At Opticks, we make it our business to ensure marketers are aware of the threats inherent within affiliate marketing, the biggest being sophisticated ad fraud.
Affiliate marketing fraud happens when high tech criminal organizations misuse the complexity of the affiliate landscape to illegally profit by generating fake subscriptions, installs and lead form captures.
We’ve put together this list for forward-thinking businesses, in an attempt to coach businesses on how to identify affiliate fraud and protect their digital funnels, marketing budget and the integrity of their product data.
How to identify if your affiliate partners are fraudulent?
An unexpected improvement
Whenever campaign performance decreases, marketers jump to action. But when campaigns appear to be performing well, the temptation is to relax and be thankful.
Unfortunately for marketers, affiliate fraud is sneaky, marketers must be alert at all times – especially when campaigns seem to be working. When the dashboard shows an improvement, marketers should be asking themselves why the campaign is suddenly showing better results. Some useful questions to ask in this scenario are:
- Why is the offer performing better all of a sudden?
- Have the creatives changed and how?
- Is there a new affiliate partner in the mix? And how does it compare to the rest?
Marketers might have found a golden affiliate partner but more of than not, unexpected campaign improvement has to do with affiliate ad fraud.
Low lifetime value (LTV)
If product signups or app downloads are incongruent with in-product activity, there is something wrong. It is important to observe the synergies between specific affiliate partners and the users they deliver, a dashboard showing this data on a granular level is extremely useful. Since it is very possible that ad fraud is being used to trigger fake events and drive affiliate commissions, it is extremely important for marketers to keep an eye out for the sources of low LTV users.
Loads of traffic but zero conversions
This can happen for a variety of reasons:
- The offer isn’t clear
- The ad banners being used are misleading
- The CTA button isn’t working
Alternatively, it could be related to affiliate fraud. In cases where clicks are manufactured by bad bots or click farms with no intention of seeing the customer journey through to a conversion.
Increase in user complaints
If conversions were triggered by fraudulent means, the users whose accounts have been used to make bogus purchases will eventually realize and demand refunds or unsubscribe. If marketers observe a rise in user complaints, they should trace them back and investigate the affiliate partners that delivered the unhappy users.
A traffic jump from an unexpected geography
If your brand is a premium digital service targeting users in The Netherlands, a sudden surge in traffic from Russia or Indonesia is probably useless, it drains your digital budget and should be investigated.
Last note: marketers should remember to be cautious when working with affiliate networks and remember to enquire into the types of alliances between networks and affiliate partners. It is important to do a thorough background check on affiliate networks and make sure their relationships with affiliates, webmasters and bloggers are transparent and strictly regulated in case there is an instance of fraud.
Affiliate fraud is ever more sophisticated
Fraudulent organizations work 24/7 and specialize in corrupting healthy affiliate marketing channels. To protect your digital ad spend from fraud, marketers need to make sure their performance metrics are reliable.
The only way to effectively ensure that only high-quality traffic and legitimate affiliate partners get rewarded is to integrate dedicated ad fraud solutions into your product. To find out how you can protect your affiliate marketing campaigns from ad fraud with Opticks, simply book a demo.