David Gasparyan is the founder & president of Phonexa, a turnkey marketing suite for calls, leads, clicks, email, SMS, accounting and more.
As the affiliate marketing space continues to grow, so too has widespread fraud plaguing affiliates industrywide. Data from a study by CHEQ shows that affiliate fraud rates have nearly doubled in the past two years.
There are countless ways for scammers to defraud affiliate marketers. The most common affiliate marketing scams include—but are not limited to—fraudulent leads, click spam, spoof traffic, URL hijacking and affiliate programs that require payment to join.
As the founder and president of Phonexa, a company that offers a turnkey suite of automated performance marketing solutions, I have a wealth of experience working with marketers in the affiliate marketing space. From my experience, there are various approaches affiliate marketers can use to mitigate fraud.
The following are four effective strategies for deterring affiliate marketing fraud.
1. Conduct a thorough evaluation of affiliates new to your program.
Effective fraud mitigation starts with a thorough understanding of all new members joining your affiliate program. This is a crucial first step for deterring fraud, as the practices employed by new members will directly affect the performance of your affiliate program and, ultimately, impact the reputation of your brand.
The following are just a few warning signs to consider when assessing members who recently joined your affiliate program:
• The new affiliate’s email address doesn’t match their website’s URL. This is indicative of a lack of transparency on the new affiliate’s end and can serve as a major red flag moving forward.
• Failure to promptly respond to emails or requests for communication. A lack of communication is especially concerning if a particular affiliate is engaged in highly suspicious activity.
• Marketing and selling a diverse range of products. This doesn’t necessarily guarantee that a new member is engaged in fraudulent activity. Still, if the affiliate is regularly converting leads with ease (especially for a wide array of products or services that are traditionally harder to sell), this may imply that fraud is taking place. Take note of any significant increases in conversion rates, as this may indicate transaction fraud or click spam.
• A surge in chargebacks. A sudden surge in chargebacks from a relatively new affiliate is one of the biggest red flags to monitor since commissions are often paid months before fraud-related chargebacks are processed, making this a popular scam for fraudulent affiliates.
Mitigating fraud requires more than simply relying on background checks before onboarding new members into your affiliate program. Perform an assessment on new affiliates by evaluating their website and email address to …….