Affiliate Marketing Fraud in 2023: Whose Link Is It Anyway?

By Van Chappell, General Manager, BrandVerity

“Whose Line Is It Anyway” debuted in 1998 to living room audiences everywhere challenging improv actors like Wayne Brady, Drew Carey and Ryan Stiles to create completely improvised entertainment in front of millions of people, live, every week. Digital affiliate marketing is nearly as old as Whose Line, and similar to the comedic confusion that ensued when asking actors to create funny scenarios on the fly, another type of chaos exists for the affiliate industry that causes a not so funny concern.

Whose Link Is It Anyway?

Affiliate marketing enables brands to reward publishers for driving transactions–a pay-for-performance model that gives brands necessary flexibility to offset the cost of their primary sales and marketing channels. Since the dawn of web 2.0, affiliate marketing has been a part of online sales strategies for companies large and small. But like with most technological capabilities, there exists some measure of risk in the abuse of said technology for nefarious purposes. The industry refers to this as affiliate fraud.

Investopedia defines affiliate fraud as “any false or unscrupulous activity conducted to generate commissions from an affiliate marketing program. Affiliate fraud also encompasses any activities that are explicitly forbidden under the terms and conditions of an affiliate marketing program.” Affiliate fraudsters use several tactics – url hijacking, stolen lead generation data, website cloning, cookie stuffing and other methods – to falsify activity for the purpose of getting a commission. The industry as a whole is well aware of the practice. But as the industry has been made more effective by evolving technology, so have evolved the schemers looking to earn a check they didn’t earn.

A Quandary of Responsibility

The affiliate industry works like this.

A brand or retailer works with affiliates to promote their brand, products or services to consumers, primarily through digital means — websites, social media, newsletters and more. In turn, those affiliates earn commission for the conversions generated from the traffic they refer to the brand. Major affiliate networks or platforms begin the work of engaging publishers, content creators and the like to create content wherein clickable affiliate links are embedded for readers or viewers who are interested in learning more about a product mentioned in the body of the content.

Getting the most out of affiliate marketing requires the curation of a diverse makeup of publishertypes, each bringing their own unique capabilities and audience demographics that allow brands to connect with right-fit consumers at scale. Included in a diverse affiliate makeup are sub-affiliate networks, who represent an aggregation of traditionally,  long tail, top-of-funnel publishers, that access tracking and promotional content from the sub-affiliate network.

It is here – the gap between sub affiliates and the individual publishers they work with – where many types of fraud often take place. Three steps removed from the end client, bad actors have enough distance from both the end client and the primary affiliate company to employ fraudulent efforts to earn a commission under the cover of scale. Brands that aren’t leveraging link tracking to identify fraudulent behavior within a singular partner ID tied to sub affiliate networks puts them at even greater risk of fraudulent activity.

It raises a particular question for the affiliate industry at large. Who is ultimately responsible for mitigating the negative impact of the affiliate schemers?

Some believe the responsibility lies with the sub-affiliate to police their networks to ensure bad actors are purged and prevented from returning. Others believe it is the work of the primary affiliate network or platform), as they are effectively utilizing sub-affiliate networks to do the work. And there are still others that think retailers that utilize affiliate marketing need to understand the compliance required as part of earning revenue through the channel.

The answer may be a combination of efforts of all parties involved. Similar to Wayne Brad and crew’s unique talent for working together to create comical performance art on the fly, affiliate networks, sub-networks and brands alike need to be in concert with one another to hold each other accountable to ensure the channel is as effective, and fraud free as possible.