4 Types of Frauds in Affiliate Marketing That You Should Know
Since the nineties, E-commerce environment has definitely grown in an uncontrollable way, bringing benefits to everyone who decides to participate in the selling chain: from the retailers to advertisers and promoters. It's an unpredictable win-win game that was born in personal blogs and small websites, went through social networks and it’s now available in the physical marketplace, such as eBay, Amazon — the biggest in the US — and MercadoLibre - in Latin America.
In this scenario, there is also the "Affiliate Marketing" that aided E-business and web marketing getting even more popular. Even though web marketing and E-commerce reached a point of no return, there are some risks that you should considerate in order to achieve success in this niche. Follow the sections below and know a little bit more about it.
Why Affiliate Marketing?
There is a moment in every retailer’s life that he should decide where “his” product should be advertised: Will the product have better results being sold on the seller’s website? Or on bigger marketplaces around the internet? What about both strategies?
Affiliate Marketing is a way to promote products reducing investments in standard advertisement. Delegating selling operations to the empowerment of the company’s customers, who will promote the product within their personal network or even invest in an advertising campaign to boost sales and earn commissions.
After having a solid selling platform, Affiliate Marketing is an exceptional way to promote products due to its simplicity - in a nutshell, you just need to generate a link and start selling — it is cheap and trustworthy - and the most importantly: it works!
Advertising Models (CPM, CPC, CPA)
Moving onto other marketing strategies. Within the Affiliate Marketing there are some available models that both, sellers and advertisers, should consider choosing subsequently the one that would bring best short-term results.
CPM is the acronym form Cost-Per-Mille, which shows the return on investment for every thousand impressions of the ad. Ordinarily this strategy is advisable to promote products with higher prices in websites with higher demand, in order to reach greater number of impressions. Expensive products are normally difficult to sell in one-click, and are commonly attached to other marketing strategies, such as e-mail marketing. Paying for impressions can bring good results generating “leads” to expensive products.
CPC stands for Cost-Per-Click, which means that the company is getting return on investments for every “click” the advertisement receives. It is the best option if you are selling low-cost products and will attend to an ultimate urgency.
CPA is usually known as Cost-Per-Action but also can mean “Cost-Per-Acquisition” and is the most used strategy by sellers. By using a “tracking code”, sellers can trail user’s clicks until the final buying act. This strategy is usually recognized as a “low cost promotion” to retailers but a very tough strategy for promoters, since they will depend on other campaigns to achieve their goals.
The Dark Side Of Affiliate Marketing: Knowing The Frauds
With all that said about Affiliate Marketing, lets now dive into the dark side of this strategies. Some issues that sellers and promoters/advertisers should pay attention to..
1 — Cookie-Stuffing
Every transaction of an affiliate strategy is tracked using cookies. Meaning that when you visit a product’s website with a tracking code “attached” to your URL, a cookie is generated and kept until the end of the advertise model.
For instance, in a CPA strategy, the cookie stays on your computer until you finish the buying act, if you give up on buying, the cookie can stay for a few days — usually two or three — with the intention of changing your previous decision and complete the buying action.
Fraudulent websites commonly generate “malicious cookies” when you reach their page. After the cookie settles by providing you a tracking code without your permission, you will be carrying the malignant bug to every other website you visit during that day.
If you buy a product which is linked to a fraudulent affiliate marketing strategy, you will be giving a commission to a seller, who instead of promoting the product, only provided you a tracking code.
2— Load-Time Click
This fraud is usually associated with the CPC advertising model. When CPC is chosen, the user not only has to click on the advertisement but also stay in the destination website for an amount of time. What this fraud does is, when visitor reaches the malicious website, it automatically loads the destination page on the background, “frauding” not only the click but also the amount of seconds that the visitor will see the advertiser page.
3 — Typo Squatting
Usually exploits the user typing errors while reaching an URL. It’s hard to be deceived by this fraud while following the links or clicks on the websites. What happens here is, the malicious individual buys a domain name that is almost the same as the official website. This name can be similar to the real one or even explore the keyboard keys positions to seek common typo mistakes ( e.g, if you want to type “google” and instead you type “googlw”). This will guide the user to a fraudulent website that could afterwards redirect to the advertiser website with the malicious tracking code. Depending on the chosen advertisement model the fraudulent commission can be paid right away.
4 — Keyword Bidding
Happens when advertisers target buyers who desire a specific brand and in order to reach them, promoters bid on the brand’s name in a certain ad platform, getting prompt results. This kind of actions are not usually considered as fraudulent by sellers. People must be aware that some retailers prohibit this explicitly in their terms and conditions. Nowadays most sellers are protecting their brand’s name from being associated to borderline websites that may astonish consumers between the proper brand and a “copycat”.
What is your assessment about Affiliate Marketing and its frauds? What do you usually do to avoid them?
If you enjoyed this article and are excited about promoting a product, or selling one, through affiliate marketing please leave your message in the comments below.
