Last week, we told you about The Knot breaking the rules of engagement with their advertisers in what was likely an attempt to drive up revenue to lure investors. In earlier posts, we’ve talked about choosing your affiliate marketing partners wisely to avoid fraud.
In this week’s example, we see worlds collide as subcontracted affiliate marketers generated revenue not by selling ads they didn’t run but by running misleading ads and driving visitors to subscription signups that didn’t deliver on their promises for their products and services. Like many relationship statuses, this story is complicated and has many layers.
What’s Good for Affiliates Is Unfortunately Also Good for Fraudsters
First, let’s start with understanding how fraud occurs in affiliate marketing. Affiliate marketing fraud happens when bad affiliates use deceptive techniques to generate fake leads or sales attribution to collect unearned commission income.
Already a $17 billion industry, affiliate marketing is expected to more than double by 2030. Wherever there is a growing industry, fraudsters also look for ways that they too can profit. On average, fraud makes up 45 percent of all affiliate traffic. This is obviously a cause for concern for anyone entering into an affiliate marketing deal.
How does affiliate marketing fraud happen and seemingly so easily? With such a high percentage impacting the industry, the bad actors employ a common variety of techniques and types of ad fraud, including:
Also known as cookie dropping, cookie stuffing can lead to misattribution when a website drops third-party cookies onto a visitor’s browser. Merchants then unwittingly attribute sales or leads to the fraudster and pay them for leads or sales they did not generate. In the meantime, legitimate affiliates lose money and trust in the companies they’re promoting.
Also known as affiliate link hijacking, affiliate hijacking occurs when fraudsters clone or redirect traffic from affiliate web pages. Once again, this can lead to the fraudsters getting credit for sales they did not earn while hard-working affiliates miss out.
Advertisers are often willing to pay more to run ads on popular websites with high traffic volume from their target audience. Affiliate marketing fraudsters spoof these sites with a fake URL that closely resembles that of the actual, hoping to deceitfully cash in.
Unauthorized promotion methods
You probably won’t be surprised to learn that fraudulent affiliates don’t follow the rules of your affiliate marketing program. They are not above using spam or misleading tactics to deceive site visitors and get paid commission before customers realize they haven’t gotten what they thought they were paying for and request a credit that results in a chargeback.
This leads us to a true affiliate marketing crime story that drove up both revenue for the fraudulent affiliates and chargebacks for a digital media company.
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How One Company Fought Affiliate Marketing Fraud and Won
After entering into affiliate deals, a subscription digital media company saw increased subscriptions through their affiliate marketing partners. That was good news and the results they’d hoped for, at least temporarily. Just as well as things had started, the experience quickly turned sour. They eventually encountered a high volume of chargebacks when many of these new subscribers began canceling their subscriptions. Because the affiliate partners had already been paid for the signups, the media company started losing money.
In addition to an increase in canceled subscriptions, the company was notified by Amazon Web Services (AWS) that its AWS standing was also at risk of being in jeopardy. The cause? AWS identified their website was being attacked by fraudsters. The company knew these problems needed to be addressed quickly, so the search for a new anti-fraud solution began.
The biggest challenge was solving the affiliate marketing fraud issues. Many of the prospective fraud partners didn’t have the capabilities to identify fraudulent affiliates. The company’s security, fraud, and compliance specialist reached out to Anura after seeing them mentioned in an online article. After a live demo and a successful trial, where she learned how easy it was to install and integrate Anura’s ad fraud solution, she knew she had finally found the right partner.
Anura was unique in its ability to identify fraudulent affiliates who, as it turns out, were using misleading ads that lured visitors to subscribe to content that the media company did not have. It was this fraudulent tactic that led to an excessive number of subscriber cancellations and chargebacks. Once the fraudulent affiliates were brought to light, the digital media company severed ties with the web marketing company that had subcontracted them.
The Fight to Prevent Affiliate Marketing Fraud Fight Goes On
If you think you may have affiliate marketing fraud, you are probably right, and you are not alone. Anura has helped several companies detect and stop their affiliate fraud. In doing so, we’ve learned which methods deliver consistently positive results for any situation. We’ve also helped companies streamline their affiliate vetting process so they can begin to see their business grow.
Fraudsters don’t rest, so we don’t either. We combine machine learning with human experience to better detect affiliate marketing fraud in all its forms and, of utmost importance, with unsurpassed accuracy and in real-time. We’re committed to providing ongoing support with monthly training webinars and quarterly data reviews, as well as online resources.
Time is money, so detecting and stopping fraud instantly keeps our clients from losing money to fraudsters. That’s also why our support team is available 24/7 so we can quickly respond to clients when they have a concern or detect suspicious activity.
In addition to stopping the bad guys, having Anura in your corner allows you to focus on what is working. By identifying where your best leads are coming from, you can dedicate your marketing dollars to those affiliates and channels that perform well for your company. Our 99.999 percent accuracy rate when identifying fraud means no false positives and no lost opportunities. You can trust that every sale or lead is legitimate, leading to increased revenue and improved campaign ROI.
Is it possible to eliminate affiliate marketing fraud and build a more robust affiliate network? Anura has done it before, and we welcome the opportunity to do the same for your company. Schedule a demo today!