Navigating the Affiliate Marketing Channel with Craig McGlynn Episode 8: Fraudsters & Scammers
This article is the eighth in an ongoing informative series written by Craig McGlynn, the EVP or Agency at leading Affiliate Management Agency, Perform[cb]. The series covers topics of interest to people in the Affiliate Industry, considering launching an affiliate program, or scaling an existing affiliate program. Links to the previous articles are below!
Are affiliate programs just full of fraudsters and scammers?
Back in the late ‘90s and early 2000s, affiliate marketing was basically the wild west of digital marketing. Nobody really understood affiliate marketing’s seedy underbelly – except a small number of fraudsters who took advantage of well-intentioned brands looking for a new acquisition channel. These scammers made money through nefarious tactics designed to earn commissions for sales they truly did nothing to drive.
This behavior spun out of control until a monumental enforcement action took place in the case of two eBay super-affiliates, landing them in prison. This became a watershed moment in the industry, and affiliate marketers began to learn how to combat industry fraud.
You’re probably thinking – why are you telling me this – with a scandalous past and history of fraud, how can I trust that affiliate marketing isn’t a scary place to invest my marketing spend? Thankfully, the industry has had years to recover and, thanks to some pretty innovative technology as well as a commitment to creating a legitimate channel for acquisition, the industry now boasts some of the best compliance and regulatory measures in digital marketing – as long as you’re working with the right people.
It’s taken decades for all participants in the affiliate ecosystem to recognize and take ownership for fraudulent and low-value tactics in the performance marketing channel, but the result is that many companies and tools have been created to address the problem. Companies like BrandVerity (acquired by Partnerize), platform functionality like Impact’s fraud protection suite, and even agency tools that stop fraud in its tracks like our own PerformSHIELD by Perform[cb].
When people ask me about fraud in affiliate marketing, I let them know that while it’s never going to completely vanish, there are proven best practices to protect your brand:
- Depending on the type of affiliate program you are running, there are different types of fraud and low-value actions that you need to be aware of. For example, if you are a lead-based program in a highly-regulated business, I would recommend you seek the expertise of an affiliate agency to help you minimize your susceptibility to a larger amount of fraud. Marketing compliance, anti-fraud software, and thorough pre-vetting of affiliates are critical to a clean program.
- Programs where deal and coupon sites are major conversion drivers are at risk of low value actions like brand bidding, where your own affiliates are bidding on your primary search terms and your own brand trademarks. While there are trademark-bidding affiliates that add incrementality, unauthorized brand bidding can jack up the rates on your own search terms, costing you money and potentially leading to affiliate commissions where the affiliate isn’t truly responsible for the sale.
- CPA-based programs can be a little less tricky – as long as someone audits the results on a regular basis to make sure there are no duplicate transactions or other fraudulent or low value activity. This is particularly relevant for transactions that fall outside of your terms and conditions. The good news is that if you audit regularly before transactions lock, you can avoid paying those commissions, and in many cases you can claw those back after the fact (although clawbacks are a poor experience across the board, but that’s a topic for another article).
- Crafting a quality set of terms and conditions for affiliates and enforcing them is a key part of running a clean affiliate program. Affiliate agencies can be instrumental as an audit resource by helping you establish and continue to enforce or refine these terms and conditions.
Over the past several years, so many tools have been introduced to combat fraud in the landscape that it has created a multi-layered set of safeguards to help you maintain a clean program.
Partnering with an experienced affiliate marketing agency will make sure you’re able to get the most out of your affiliate marketing strategy without any hiccups from unsavory fraudsters or scammers. Connect with an affiliate management expert today!
Stay tuned for our next episode and if you missed any of the previous seven, check out the other articles in this series:
- Utilizing a Full-Funnel Approach
- What is an Affiliate Program?
- Major Players in the Affiliate Ecosystem
- How & When to Launch a New Affiliate Program
- Can Affiliate Work for B2B Brands?
- The Budget Needed to Run an Affiliate Program
- Working With Influencers in Affiliate