Affiliate Frauds – Meaning, Process, Types and Effects

Affiliate fraud is an alarming and unethical activity. It is a growing concern for online marketers. Many modern-day brands rely on affiliate marketing to promote their services and products. Affiliate fraud prevents companies from reaping the large-scale benefits of affiliate marketing.

The worst part about affiliate ad click fraud is that you may fall victim without noticing it. Ad fraud happens when an affiliate fakes an action to steal a commission. Affiliate fraud can affect both sides of the affiliate industry.

Legitimate affiliate marketers suffer losses when malicious affiliates redirect purchases. Marketing teams incur losses because they pay commissions for fake sales and clicks. Here are some essential things one should know about affiliate ad click fraud. 

Overview of Affiliate Fraud

Affiliate fraud is a type of advertising fraud that involves corrupt activities to collect commissions from affiliate marketing programs fraudulently.

Malicious affiliates leverage redirecting junk traffic to your website to trigger affiliate rewards. In many instances, they also use bots to create affiliate fraud. With effective affiliate ad fraud detection in place, you can identify the deceiving practices of malicious affiliates.  

How do Malicious Affiliates Commit Fraud?

Malicious affiliates are creative when the context is about committing affiliate frauds. Mentioned below are some standard methods with which they commit fraud.

●       Faking a Conversion: Whether it’s a click or a sale, much affiliate fraud revolves around malicious affiliates faking a conversion. By faking the conversion, they can collect commissions. Malicious affiliates rely on bots to fake conversions.

●       Using Duplicate Content from other Affiliates: Legitimate affiliate marketers leverage good content to produce conversions. Nefarious affiliates scrape the websites of legitimate affiliates are re-create original content to redirect traffic. By scraping the websites of original affiliates, malicious affiliates take credit for the conversions.     

●       Click Injection: Click stuffing involves a malicious affiliate simulating clicks on ads. They often use bots to execute click stuffing. When the user installs an app organically, the malicious affiliate will get a commission even without any marketing endeavors. 

Common Types of Affiliate Ad Fraud

Here is the list of common types of affiliate frauds.

Click Fraud

Click fraud involves the cost-per-click (CPC) affiliate campaign. Here the advertiser pays an affiliate for every click the ad receives. Click fraud takes place when a nefarious affiliate fakes the clicks. Malicious actors can create click fraud by manual means or using bots.

Manual click fraud takes place when the malicious affiliate physically clicks or pays to click on ads. You can find many click farms that click ads to create frauds. But nowadays, nefarious affiliates rely on bots for click fraud.

They often infect many devices with the same code through the use of malware. Known as a botnet, it can create thousands of fake clicks per minute. Companies are using click fraud protection platforms to safeguard their affiliate network.   

Install Fraud

Install fraud comprises the cost-per-install (CPI) model. In this model, marketing teams pay the affiliate for every installation of their application. Brands, gaming companies, etc., use this model to generate conversions.

Nefarious affiliates fake the installs by using bots or malware. Malicious affiliates rely on advanced bots. These bots can even forge user actions within the app to make the app install seem legitimate.

Lead Fraud

In lead fraud, the malicious affiliates leverage the cost-per-lead (CPL) marketing model. Lead fraud occurs when malicious affiliates generate fake leads. In lead fraud, the marketing team ends up paying for the fake leads. In lead fraud, the nefarious affiliates rely on manual techniques and bots to fill online forms. 

Sales Fraud

In sales fraud, the nefarious affiliates take advantage of the cost-per-sale model. Sales fraud takes place when the malicious affiliate fakes a sale with the help of stolen credit card information. Sales fraud is a severe type of affiliate ad fraud that can severely affect the reputation of marketing teams. The credit card company charges the company to return the purchase funds. 

Repercussions of Affiliate Ad Fraud

Monetary losses are the immediate repercussions of affiliate ad fraud. But apart from financial losses, the company tends to lose its reputation among its target audiences. Here are the repercussions of affiliate ad fraud.

●       Loss of Confidence: Frequent occurrence of affiliate fraud degrades the confidence of your company’s marketing team. Fraud also tarnishes the image of the entire affiliate industry.

●       Wasted Time and Loss of Productivity: Chasing fake leads can be detrimental to your company’s revenue objectives. Dealing with fraudulent conversions and chargebacks can be equally frustrating. It also consumes hours and affects the productivity of your company’s entire marketing team.

How to Prevent Affiliate Ad Frauds with Virus Positive Technologies?

As one of the best affiliate ad fraud detection companies, Virus Positive Technologies will help you secure your affiliate network. With VPT’s advanced fraud protection platform, you can quickly identify malicious affiliates. It becomes easier to prevent cookie stuffing and hijacking with Virus Positive Technologies.