Signing up affiliates to help promote your brand and sell your products is not a bad way to increase your company’s reach. Affiliates become surrogate advertisers who bring in new customers for you. But the same affiliates could be ripping you off. Unfortunately, affiliate ad fraud is a real thing. It might be hurting your business big time.
To be fair, the vast majority of affiliates are entrepreneurs like you. They are genuinely interested in making an honest living through affiliate promotion. But as with any other type of business, there are some who think nothing of committing advertising fraud.
What is advertising fraud? It is any form of fraud perpetrated against companies via their advertising means. Affiliate ad fraud is just one of the many ways it is perpetrated, according to California-based Fraud Blocker.
How Affiliate Businesses Work
An affiliate is generally a small-time operation that seeks to generate revenues by representing known brands. They publish their own websites through which they deliver relevant content to the brand’s customers. Ideally, that content is intended to drive traffic to the brand’s website, where customers will hopefully make a purchase.
Affiliates are paid for driving traffic, generating conversions, or both. This model indicates that it is in an affiliate’s best interests to drive as much quality traffic as possible. But doing so isn’t always easy. Some affiliates find it easier to commit affiliate ad fraud than put the work into building legitimate high-quality traffic.
How Affiliate Ad Fraud Works
There are numerous ways to commit affiliate ad fraud. However, the most utilized strategy involves creating fraudulent ads disguised as legitimate ads produced by the brand in question. It is not as complicated as it sounds.
Affiliates are almost always forced by a brand’s terms and conditions to not purchase pay-per-click ads that compete directly with the brands they represent. This is designed to prevent them from driving up the brand’s cost for certain keywords.
According to Fraud Blocker, affiliate fraudsters have access to a remarkably effective workaround. That workaround involves creating their own spoofed ads designed to look exactly like the brand’s legitimate ads. They do this because they know their own visitors are more likely to click a branded ad.
Hurting Brands in Two Ways
Creating spoof ads benefits affiliates by driving traffic and encouraging sales. The more traffic they generate, the more they earn. The same goes for click-throughs resulting in a genuine sale. For the brand however, spoofed ads hurt in two ways.
First, even though the affiliate has not bought legitimate pay-per-click ads using competing keywords, the effectiveness of those keywords is still measured by Google and other ad platforms. So the spoofed ads still drive up the cost of PPC advertising with every click.
Second, the brand is still shelling out commissions to affiliates for the traffic they generate, despite those affiliates inadvertently increasing competition for the most desirable PPC keywords.
A Double-Edged Sword
Unfortunately, it is a double-edged sword for brands. Affiliates choosing to practice affiliate ad fraud are driving costs higher and earning illegitimate commissions by spoofing them. It is like adding insult to injury with every click-through from a fraudulent ad.
The lesson here is to be incredibly careful when working with affiliates. The affiliate model is an effective way to increase brand reach and drive revenues. But it is also a good way to be victimized by fraudsters who think nothing of taking advantage of a generous affiliate program.
If your business utilizes affiliates, there is no reason to stop doing so. Just pay attention to what your affiliates are doing.