Affiliate marketing has been one of the fastest methods for promoting and growing your business effectively. The COVID-19 pandemic had its destructive effects on various industries, but the affiliate industry had grown like never before and enjoyed 45% revenue growth compared to the year 2019. Due to the pandemic, there has been a significant increase in internet users. As a result, the scope of growing your business with affiliate marketing is limitless. However, most of you may be skeptical or just simply at a loss about how to choose your affiliate partners. The questions are limitless, and the answers you get from the internet may be vague or not sufficient to reassure you. So, here we are, trying to give you a clear concept of what to look for when hiring your affiliate partner.
What Does an Affiliate Marketer Do for You?
Before diving deeper into the details, let’s have an overview of what affiliate marketing does for you. You already have a great product or service. Now you are trying to spread the word to your target audience. Before internet marketing, advertising through newspapers, television channels, or delivering flyers door to door would do the trick to spread the word. However, as the internet is now available to almost all people around the world, there are more potential customers, more leads to grab, and more competition to face as well. The affiliate industry helps you tap into all those sectors. Affiliate partners create advertisements to promote your product or service, effectively funnel the potential consumers, and give you an edge over the competition. Does it seem fair enough? Absolutely. Is there any risk? Of course! You cannot run a business without taking risks. When you are outsourcing the marketing for your business, it requires a significant level of trust, which can be exploited by anyone at any moment. Let’s discuss those risks.
Risks Associated with Affiliate Marketing
Affiliate marketing has its own share of risks. However, if you are aware of these risks, you can take measures to avoid or work around them. Let’s have a look at the most crucial risks you need to consider before you decide to use affiliates to market your product or service.
When it comes to affiliate marketing, the most prominent issue that a business owner should be aware of is fraudulent activities. Affiliate frauds do not only trick you into paying more for less work, but also destroy the reputation of your business. As per the job description of an affiliate marketer, they drive traffic to your business website, promote your product from their platforms, generate potential consumers, and protect the consumers from mishaps. However, a sketchy affiliate marketer can significantly exploit all these. Here are a few ways that a fraudulent affiliate partner can trick you or harm your business:
- Faking the leads: Generating leads is difficult, and requires hard work. Lead generation includes, but not limited to, collecting the name, phone number, email address, and other informed mation that will help you to promote your products to potential consumers. However, you simply can’t sell your products to literally anybody, and you need the information of a targeted group of people. Your affiliate marketer makes sure of it. Unfortunately, some affiliate marketers are unwilling to go through the hard work. When they are told to deliver targeted leads, they may buy the data from some shady website. The information from those shady sites is not suitable for you as the target audience has not shown any interest in your products. In many cases, the data could be fake. As a result, you may end up reaching out to people who won’t respond, or don’t even exist!
- Generating fake conversions: Some affiliates would do anything to receive a commission, and that includes generating fake conversions. When you are looking for a conversion, there is a purpose behind it. For example, if you want someone to install an app, you want that person to use the app. However, fake conversions portray that the desired action has been taken, while it’s for literally no use. You may see that someone has installed your app, but they will never use it if the conversion is fake. Some affiliates even own websites to generate fake conversions, where they give a few cents to random internet users for clicks, registrations, downloads, form submissions, and some other actions.
- Credit card fraud: Some affiliate fraud takes things even further. They can conduct credit card fraud to cheat and claim the commission. In some cases, they may knowingly use stolen credit cards to complete a conversion. They may purchase stolen credit card details from a shady website and use this to complete a purchase via their affiliate link. You believe this is a valid purchase and pay commissions, while that’s not the case. When the user finds out and files a complaint to their bank, the purchase gets invalidated and they get their money back, resulting in a chargeback for you. You lose in three ways. The first is loss of product, the second is loss of payment from the customer due to the chargeback, and finally loss of money in the form of commission you’ve already paid out to the affiliate. It can take up to 120 days for a customer to dispute a charge and start a chargeback with their credit card issuer. It gives the fraud ample time to get away with the commission amount.
- Cookie stuffing: “Cookie stuffing” is a method of an affiliate merchant’s tracking system to conclude that a user has clicked through a tracking link even if they didn’t. These affiliates do not only cheat your business, but also deprive other affiliates of their hard-earned commission. They steal and overwrite the cookies of other affiliates and claim commissions for themselves when a referred user completes a conversion through other affiliates’ links. It is bad for you for two reasons. First, cookie stuffing might make you pay commissions for purchases that would have happened without an affiliate. Second, honest affiliates might start distrusting you.
If your products are represented in a way that is anything less than the truth, it doesn’t contribute to your reputation. Consequently, misleading ads can destroy your reputation, and as a cherry on top, you can be slapped with a lawsuit. Here are a few ways that can be adopted by crony affiliates to create misleading ads for your business:
- Offer discounts that are not there: Giving away discounts is always an effective method of promoting your products or services. Therefore, affiliate marketers appreciate this approach. However, to generate more conversions, fraudulent affiliates may advertise that the consumers will get a certain percentage of discount if they follow their link where you may not even offer any. Additionally, they may increase the actual price of your product and promote the discount. This can highly hurt your business’s reputation and your marketing efforts.
- Faking a brand’s or celebrity’s affiliation: Everyone nowadays is obsessed with high-end brands and celebrities. Dishonest affiliates may falsely try to use this obsession and promote your product stating that a high-end brand has approved your products or a celebrity uses your product all the time. However, the brand or the celebrity may not even know about you. Because of this, you may face a lawsuit for falsely advertising your products.
- Promoting benefits that your product doesn’t offer: Another way affiliates may try to promote your product to generate commission is by overselling it. Every product has its own benefits and limitations. In some cases, affiliates would lie about some benefits that your product does not have or offer a service that you do not provide. This will give your product or service a bad name when the consumer receives the product and doesn’t get the benefit that was advertised.
- False media article: Endorsement of a well-known media like CNN, Fox, BBC, CBC, etc. can go a long way in promoting your business. You need to work very hard to get featured in those leading media. Some affiliates may take a shortcut and fake an article to look like you have been featured to prove your business’s credibility. It does not do well in the long run, and you will be highly criticized for this stunt.
Mitigating Affiliate Fraud
It is evident from the above discussion that a fraudulent affiliate can ruin your hard-toiled business within a matter of time. Therefore, before recruiting affiliate marketers, you need to screen out the frauds to prevent your business from being demolished. You can follow some protocols to effectively banish those frauds and keep your business safe. Here are a few tips that can help you:
Screening the Affiliates with a Set of Questions
Asking questions before approving an affiliate marketer to promote your product or service is always an important step. When you ask the right questions, it can effectively help you avoid fraud and trust the best affiliate marketers to promote your business. Ask as many questions as you like till you are satisfied with the answers. Additionally, ask for a reference of the affiliate’s previous partners, and ask for an endorsement. Don’t be afraid to ask questions and make rush decisions.
Here are some questions you must ask your prospective affiliate partners:
- What channels do you use for promotion?
- What is your method of promotion?
- Why do your followers/visitors trust you?
- What tools do you use to generate conversions?
- How much revenue did you generate last month as an affiliate?
- Please share screenshots of the revenue showing today’s date/time in the bottom/top right corner.
- What are your top products or services based on revenue for the last 2 weeks?
- Which networks are you currently working with? Who is your rep?
- Which direct advertisers are you working with? What are their products?
Answers to Look for to Spot a Fraudulent Affiliate
A fraudulent affiliate will most likely not be able to provide proof of their claims. At times, they won’t even want you to talk to previous partners they have worked with. In some cases, they will make unrealistic promises, such as unusual conversion rates. They often don’t have a proper roadmap to promote your products. A genuine affiliate on the other hand, will happily show you endorsements, and give you a clear idea about the method they will use to promote your products.
Built-in Fraud Protection from Affiliate tracking Platforms
Tracking affiliate fraud is a difficult job, but it has been made easy by built-in fraud protection mechanisms. Today, many platforms like PartnerLaunch, Everflow, Vollum, etc., can effectively block click fraud and fake traffic in real-time. These platforms automatically detect scams, proxies, fake clicks, bots, fake users and prevent them from harming your business. You get to set your own required features that go well with your business. Thus, your business can be limited to the amount of affiliate frauds and flourish the way you planned.
Running a business is never easy, and it’s more difficult to grow without a hitch. However, when you are prepared for the mishaps, you can avoid them effectively. Affiliate partners can grow your business or diminish it to the dust. So, take your time, choose wisely, and keep the preventive tools ready to detect fraud at the earliest.