Types Of Fraud In Affiliate Marketing

1. Cookie Stuffing

Cookie stuffing, also called cookie dropping, is when a fraudster sneaks a modified cookie onto a visitor’s computer without their knowledge or any action on their part. This cookie tracks the user across different sites, and when they make a purchase, the fraudster gets credit.

This tactic exploits the "last cookie counts" rule used by most affiliate programs, which places the fraudster’s cookie last, making it seem like the user bought via their affiliate link. Meanwhile, the affiliate that made the actual sale never gets credited.

2. Click Fraud

One of the most popular frauds in affiliate marketing is the practice of inflating the number of clicks through unethical ways. This is a popular fraud tactic in cost-per-click (CPC) campaigns where the success rate of each affiliate is measured by the number of clicks they get. The affiliate benefits while the advertiser loses, as they receive a higher payout than deserved due to skewed numbers.

Click fraud occurs in two major ways. The first is when an affiliate manually fakes the clicks or pays someone else to click on ads, while the second is using bots to target a website and click on the ads. In many instances, the fraudster also infects many computers with malicious code to create a botnet, a group of computers directed to websites to click on ads.

3. Ad Hijacking

This is when an affiliate takes someone else’s ad and alters it so that they get the attribution. For example, they may replace the affiliate link with their own and get the commission instead of the original publisher.

4. Typosquatting

We’ve all made the mistake of typing a URL into a browser only to discover a misspelling. In this method, the fraudster targets users who misspell a web address by buying a domain name that is almost identical to the official website. The difference is usually one or two letters that visitors are likely to miss.

As a result, when users type in the URL with the accidental typo, they are redirected to the fraudster’s version of the site. This practice is wrong because it is not genuine click-through traffic brought to an advertiser via the site they are paying to advertise on.

5. Domain Spoofing

Domain spoofing refers to a situation where an affiliate pretends to be a premium publisher while actually being a low-quality publisher. The idea is to make advertisers think that their ads are displayed on trustworthy and profitable websites to get paid more than they deserve, even though it’s false because they end up on irrelevant ones.

1. Research the Affiliates

Researching affiliates can be challenging when collecting them via submission forms. In many cases, they’ll only list their most essential information. It’s on you to dig deeper into who they are.

The affiliates’ social media presence is very important. For example, they may have a lot of followers with suspicious-looking accounts (like bots), meaning they may be faking their follower count. Anything that stands out as odd to you should be taken as a genuine concern.

Also, discuss affiliates with other marketers on forums or review sites. Even better if you have marketers in your network who have their own affiliate programs and can share their opinions with you.

2. Protect Yourself with Contracts

Before you start managing affiliates, send them affiliate contracts outlining your terms and conditions. Define each affiliate’s responsibilities in your program, such as the number of expected leads for a certain period.

Besides KPIs, list the termination terms of your contract. Create a list of behaviors that could lead to termination, such as affiliate fraud. Besides the immediate termination of the contract, you could add a clause specifying that if an affiliate commits fraud, they’d lose their commission and even face legal action.

3. Use Affiliate Tracking Software

Once you’ve enrolled the affiliates, install affiliate tracking software to accurately track their progress during your campaigns. This software may have advanced features that notify you of any suspicious activity, such as spikes in conversions.

IP filtering is another feature of affiliate tracking software that automatically blocks fraudulent IP addresses, and any leads or conversions made through them are deleted. This goes hand in hand with click validation, which verifies that each lead, click, or conversion coming through is from a real person.

4. Stay Informed

Be aware of any new scams in the affiliate world the moment they come out. Stay on top of the latest trends related to affiliate fraud and continuously look for ways to prevent them. The best way to do this is by:

• Reading search engine updates

• Following leaders in affiliate marketing on social media

• Subscribing to newsletters related to affiliate marketing news.

Is affiliate fraud illegal?

Yes, affiliate fraud is illegal in the case where an affiliate signs a contract stating that they can be held legally responsible for fraudulent behavior. Plus, fraud results in ad budget loss for the advertiser, which is a form of theft.

Is affiliate marketing high-risk?

Affiliate marketing can be risky but isn’t necessarily high-risk. You can stay safe by creating affiliate contracts, vetting each affiliate before enrollment, and monitoring affiliates’ traffic sources.

Does affiliate marketing really work?

When done ethically, affiliate marketing can be very lucrative for businesses. The right affiliate program software can help you create a program that would work for your needs and help you track results in real time.