February 11, 2021

5 Ways to Prevent Affiliate Fraud

By Adam Dahlen

The rise of affiliate marketing over the past five years is kind of the stuff of legend. For starters, the sector has grown an impressive 52% since 2015 and is worth an estimated $12 billion worldwide. Affiliate spend has been steadily growing and is expected to climb by 10% in the next few years–and for good reason. Affiliate marketing doesn’t require a huge investment, and the performance-based model means advertisers only pay for what they get. Better yet, a well-crafted program can boost revenue by an astounding 30%.

While affiliate marketing is a low-risk way to build brand awareness and revenue, it sometimes gets a bad rap because of one thing: fraud. Every year, an estimated 2% of all transactions are attributed to affiliate fraud, which at first glance might not seem that bad. But that adds up to well over $200 million in lost revenue each year. Ouch. 

The beauty of the affiliate marketing channel is that some of it is automated, but that also presents fraudsters with a prime opportunity to wreak havoc to the tune of about a 22% reduction in return on your ad spend. That’s a lot of wasted marketing dollars. Not to mention, a real risk to the integrity of your brand. 

Fortunately, there are ways to substantially mitigate your risk and protect your ROI.  Here are five of the best.  

1. Stop it before it starts

Sure, this one is obvious, but prevention is everything when it comes to fraud. While built-in anti-fraud tools and features in affiliate networks are great, they aren’t always enough to get the job done. Do yourself a favor and add an extra layer of fraud protection with third-party fraud-prevention tools that can block bad traffic before it even hits your site.  

2. Be picky about who you partner with

There’s no such thing as over-vetting a potential affiliate. Implement a multi-step application process, and whatever you do, make sure an affiliate is legitimate and that their content aligns with your brand’s values. Be on the lookout for red flags like brand new websites that have already garnered top ranking, big traffic spikes that may indicate bot activity, and of course, any sort of plagiarized content. 

3. Clearly communicate your terms and conditions

Make sure every affiliate knows and clearly understands exactly what type of traffic, behaviors, and practices are acceptable in your program. It’s also a good idea to have an experienced attorney review that information for any potential loopholes. And by all means, put every last detail in writing–and enforce them. 

4. Watch your data like a hawk

First and foremost, it’s near impossible to spot illegal or suspicious activity if you don’t have a way to actively monitor it (or, ahem, if you’re not regularly reviewing the data you have). Make sure you have a tool in place to capture the analytics you need to spot any anomalies or questionable activity. Some of the most common signs of fraud include sudden, unexplainable surges in traffic, an unusual amount of transactions from a single IP address, or high clicks without conversions. 

5. Be consistent–no matter what

The cold, hard truth is fraudsters are relentless and are constantly upping their game to beat the system. The absolute best strategy to prevent fraud is to be just as diligent in managing your affiliate program. That means setting aside time every week to thoroughly review your analytics and to monitor your current affiliates and to onboard new ones. 

Often, the easiest and most cost-effective way to do that is to work with an experienced team that can not only maximize every dollar you spend but also has the technology to protect your investment. PartnerCentric is the only agency in the industry that combines award-winning account management with our proprietary software tools. We call this our Technology Enabled Account Management (TEAM), and this unique approach gives you clarity and control over all of your investments in the affiliate channel, true attribution alignment, and the peace of mind that your brand is protected from ad fraud. 

Ready to maximize this effective marketing channel? Check out our quick “Horror Stories from an Affiliate Marketing Insider” video. We’ve covered a lot of ground in this short 10-minute video about things like:

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