Affiliate marketing is secretly a scam

Affiliate Marketing Fraud - You Can Do That About It

The collective term fraud refers to various types of white-collar crime. Even in affiliate marketing you are not sure about this, as it is one of the most popular, lucrative and often underestimated areas in online marketing.

Wherever money flows, fraudsters are not far away either. This also applies to affiliate marketing. Fraudsters try to get hold of the lucrative commissions without anything in return, or to push commission payments through lack of transparency. This happens both on the side of the affiliates and with marketers. Valentina Piol, Head of Affiliate Marketing at metapeople, wrote a guest article for W&V in July 2018 about the most common fraud methods in affiliate marketing. We have summarized their most important statements for you.

The most common fraud methods

Brand bidding

In brand bidding, i.e. bidding on a brand name as a keyword in search engine marketing, publishers use keywords in combination with the terms “voucher” or “discount”, although this is often explicitly forbidden in the advertiser's terms and conditions. The result: The publishers get more traffic to their portals in order to generate sales for the advertisers.

Ad hijacking

Valentina Piol sees ad hijacking as a “tightened version” of brand bidding. Here, the advertiser's ads are simply copied and placed in the search engines. When bidding, higher bids are then submitted than the advertiser. As a result, there is no redirection to the affiliate page, but rather it takes place directly to the advertiser page. The original advertisements are simply suppressed. Both cases ensure that the pay-per-click costs for the advertiser rise.

Cookie dropping or cookie stuffing

With cookie dropping or cookie stuffing, clicks are generated artificially without any active action on the part of the user. Valentina Piol explains that in affiliate marketing, cookies with the corresponding code are usually only set on the user after he has clicked on an affiliate link. With cookie dropping, a click is artificially generated by a program or an HTML tag. Affiliate-Deals.de reported in 2014 on the legendary case of Shawn Hogan, one of the most famous affiliate fraudsters to date. He secretly deposited eBay cookies in the browser of every visitor to his website, whereby he received a commission for an advertising service that he never provided.

Hidden cookies in toolbars

Toolbars are useful, provided they are knowingly installed. However, hidden affiliate cookies can be placed in them, which, similar to cookie dropping, promise the producer advertising services, but which he has never carried out.

Typosquatting

Typosquatting is based on the principle that users accidentally enter a URL incorrectly in a web browser and are then redirected to an alternative page. Some affiliates take advantage of this by registering for such “typo domains” and immediately redirecting users who accidentally land on such a page to the advertiser websites. As a result, the affiliate can also set a cookie here without their own advertising service.

Fake customer data

According to Valentina Piol, fake customer data is primarily used “when the advertiser is interested in generating leads - that is, collecting data”. By entering false data, the fraudster speculates that the advertiser will not be able to carry out a thorough data comparison and thus collect a commission.

How you can protect yourself

In addition to all the possible fraud methods, Valentina Piol also provides useful tips on how to avoid these fraudulent activities. It attaches great importance to the fact that "all actors, i.e. networks, advertisers, publishers and agencies, work together to fight fraud."

The agencies

Piol is certain: the agencies clearly have a special role. They take on an “important interface function” and can “advise and test in all directions”. It is particularly important that the agencies always keep an eye on the key performance indicators (KPIs) in order to be able to register and analyze any abnormalities as quickly as possible. In order to avoid fraud as best as possible, “the terms and conditions of the programs used by the agency must be kept up to date and adapted to current developments at all times.”

Validate publisher data

When it comes to validating publisher data, according to Piol, it's not just the networks that have a responsibility. Advertisers and agencies should also check the information provided by the affiliate before activation in order to avoid fraud as best as possible. In addition to checking the website, it is imperative to also check the affiliate's bank details.

Sales matching

In order to prevent affiliate fraud, a conscientious sales comparison is essential. Here “the transaction validation on the part of the advertiser must be carried out regularly and, above all, carefully.” Piol emphasizes that this can also be supported by the agency. The whole thing serves to determine the authenticity of the sales and the corresponding sales.

Free tools

There are a number of free tools that can help identify fraudsters. Piol calls the Firefox or Chrome plug-in Seerobots a useful tool for checking whether and how publisher pages are listed on search engines. SimilarWeb helps estimate the reach of unknown sites. The free tools Ghostery and Cookie Manager + support merchants in the fight against cookie dropping.

Conclusion

Affiliate marketing offers great potential. Unfortunately, this also attracts fraudsters. It is therefore all the more important to identify and ward off fraud methods as early as possible. In Valentina Piol's opinion - and we fully share it - one thing helps in addition to the multitude of methods to avoid fraud: Common sense. Those who are vigilant and deal intensively with their partners in affiliate marketing will quickly find out about fraudulent activities.

About the author: Lena Rymkiewitsch

Lena has been writing for the Affiliate Deals Online editorial team since 2018. She was very interested in journalistic activities from an early age. She is particularly enthusiastic about all topics related to online marketing. Sports, going to the cinema and good food are also among Lena's passions.