How much of a problem is brand abuse and fraud – whether real or perceived – in affiliate marketing, and to what extent does it hold back increased investment in the channel? Owen Hewitson, Client Strategist, Affiliate Window & buy.at tackles the dark side of the affiliate marketing…
There is a dilemma even in addressing this issue. How should it be raised without running the risk of ‘talking up’ what is still a relatively small problem in the channel overall, even if a few advertisers in certain sectors are particularly vulnerable? Affiliate marketing has always been presented as inherently lower risk than other forms of marketing due to the fact that you only pay when you get a sale, so any challenge to that claim should be taken seriously for its potential to reflect the entire industry.
Firstly, what do we mean by ‘unethical’ activity? An awareness of what activity advertisers should be aware of must come first: if you do not know the threats, you will not be able to address them correctly.
Two issues have traditionally caused the most concern. In the paid search field, unethical activity has usually meant brand abuse, the breaching of an advertiser’s Terms & Conditions related to how their affiliates may promote them with PPC advertising. But ‘brand abuse’ here might refer to activities an advertiser has not thought to include in their programme T&Cs. Domain squatting on so-called ‘fat finger’ errors is a simple example. More generally is what some usually understand as ‘fraud’. This is taken to include false orders or bogus leads submitted either by unscrupulous customers or by affiliates themselves. A less common cause for concern, but perhaps more insidious, is click fraud caused by underlying spyware or adware. Through cookie stuffing this can produce genuine sales but which have effectively been hijacked and should not be attributed to the affiliate.
The easier it is to earn a commission the more careful the advertiser has to be. Programmes that reward on leads, where the process for submitting those leads is relatively short and the information being asked for is relatively minimal, are most at risk.
What can you as an advertiser do to avoid unethical activities like this?
The first line of defence is at the level of the affiliate network itself. Ask your chosen network what measures it is taking to ensure its affiliates are who they say they are. This should give you piece of mind when you come to assess the applications of affiliates that apply to join your particular programme.
For every affiliate actively sending transactions you need to have a good idea of where their traffic is coming from. The best way of understanding this is in seeing the referrer logs that your networks should be able to share with you. These do not always show you the full picture, for reasons that might be more often due to the user’s browser than any wish to conceal this information, so where doubt arises contact the affiliate and ask for details of how they are promoting your programme. Pay particular attention to any affiliates that have risen quickly to become major revenue drivers on your programme.
Affiliates that suddenly appear on your programme within the top ten affiliates, but without previously having been active (perhaps being new to the network itself), and seeming to have no clear way in which they promote should also ring alarm bells. Again, it should be the job of the affiliate manager – either at the network or advertiser’s side – to make personal contact with these types of affiliates as a first step to verify they are genuine. Suspiciously high conversion rates should be another red flag.
If you are running a programme that pays on a lead basis, ensure that the conversions from submitted leads to confirmed customers are being closely monitored. Often there might need to be interaction with the customer shortly after their lead or application has been submitted. If this is the responsibility of another team in your organisation make sure that there is a communication channel open so that any problems contacting or converting the leads that certain affiliates send are flagged internally as quickly as possible and traced back to the individual affiliate.
Remember that it could be the customer that is responsible for unethical activity rather than the affiliate him- or herself. Do not presume guilt if you are not able to immediately ascertain the veracity of the affiliate.
Whilst unethical or fraudulent activity remains far from the norm on affiliate programmes, the perception of the threat often far outweighs the likelihood of experiencing it. But addressing the issue through pre-emption, taking relatively simple precautions and ensuring good ongoing monitoring, the risks become significantly reduced.
By Owen Hewitson
Client Strategist
Affiliate Window & buy.at
www.affiliatewindow.com
