In this article, we'll explain how the incentive to cheat arises. Next, we'll go over the most common affiliate marketing scams and how you can counter them. Finally, we'll sum it all up and provide a checklist on how to avoid being scammed.
Moral hazard and misaligned objectives
Affiliate marketing is a business, and like any business, it suffers from the classic problems of economics, one of which is the principal-agent problem . Simply put, it is a conflict of values and priorities between the entrepreneur (principal) and the employee (agent).
To understand this mismatch, let's review the assets that every affiliate has and define what they want:
Publishers have an audience they want to monetize
Affiliates are marketing savvy and want their advertising revenue to offset the cost
Merchants have a product they want to sell
To sell and make a profit - that is the ultimate goal of any company. This goal can be achieved directly or indirectly through brand awareness, registrations, installations and other targeted actions.
Publishers are trying to balance traffic poland country code for whatsapp monetization and user experience (UX). That's why they don't tolerate the advertising bombardment from marketers and ad networks.
Affiliates look for any way to increase their conversion rate so that their commissions grow.
Merchants want to actually sell the product so they need quality traffic.
Affiliates and merchants have a conflict of interest in terms of traffic: the former want it in bulk, while the latter demand it to be of high quality. In case the product owner does not have established KPIs and an internal anti-fraud system, a moral hazard arises: one party could try to scam the other.
Affiliate Marketing Scams
In the example above, we talked about how an affiliate can be tempted to scam a merchant. However, it is a two-way street, so affiliates can also be victims . Since HilltopAds is an advertising network, we will focus on the threats that loom over our advertisers and how to counter them:
Shaving Commission
Commission shaving occurs when merchants refuse to pay affiliates for quality traffic. This can happen even after tests are approved. As a general rule, the higher the payout, the higher the risk of falling into the scam.
Shaving is just one reason for a drop in performance. The conversion rate (CR) can decrease due to :
CPA Network Technical Issues
Application blocking due to outdated lines of tracking code
Antivirus mess with affiliate ID in link
Delays in updating statistics
Violation of general conditions
So, double check if you are really being shaved . Rely on the following indicators:
Approval rate suddenly drops after long run of success
The same offer from other affiliate networks works as expected
Your third party tracker outperforms CPA network tracker
Incomplete access to call center comments and/or logs
The best defense against shaving is prevention . Think about this:
Read reviews on forums before joining an affiliate network
Traffic split between CPA programs to test them
Be wary of double redirects as incorrect GEO is a violation of the offer conditions
Use your tracker so you can easily find out that something is missing
Fill out a test order to see if conversions skyrocket (ask your friend or family member)
Cookie filling
Cookie stuffing is a blackhat practice of installing third-party cookies on users' browsers to steal affiliate commissions. A publisher may accidentally install a malicious piece of code when working with shady advertisers.
That's why we encourage publishers and advertisers to sign up with HilltopAds and work with a network of trusted partners, curated by vigilant moderation.
High-ticket offers can take days, weeks, or even months to close the lead - plenty of time to infuse a cookie-stuffing script. Once there, all the creatives start working against the honest affiliate, contributing to the scammer's revenue.
Cookie stuffing makes it look like the dishonest affiliate does all the work . This is why the merchant might be inclined to offer them special conditions and higher limits. That's why cookie stuffing accounted for almost 60% of all affiliate fraud in 2018.
Infected websites drop cookies on users' browsers. A simple check is to clear your browser's cookies and visit the website in question. Pay close attention to the cookies you get: if you see click cookies without actually clicking anything, the website is infected. Make sure that the cookies in question correspond to clicks and not impressions.
Unless you have the technical know-how and understand the source code, it's better to leave the website moderation to HilltopAds and make money without worries. And even if you are a tech-savvy, two heads are better than one. Remember, even eBay wasn't able to detect their top affiliates doing cookie stuffing, until they paid out $35 million in commissions.
Pay-per-enrollment programs
Legitimate affiliate programs are open by default . You don't have to pay for the right to earn profits. Scammers may promise super lucrative conditions or access to special programs in exchange for paying a fee.
Make sure you read the terms and conditions carefully . Monthly fees, minimum sales quota, and other suspicious payments are reasons to steer clear. The initial fee to join the network is another cause for concern, as these payments are rarely a one-time purchase. It usually results in a downward spiral, resulting in the victim having to shell out more and more funds.
Next, information about the product, commission and additional resources must be communicated clearly - it is in the interest of the legitimate network.
Look for free affiliate networks - the default mode in the industry. Remember, no pain, no gain - affiliate marketing requires dedication and commitment, but it is profitable once you learn the ropes. While spending money to make more money works in some cases, a paid affiliate program is not one of them.