What You Need To Know About Preventing Affiliate Fraud With Proxies

Working with influencers to spread the word about your products is a great way to increase your sales. Many bloggers and social media influencers have a large audience of people who are anxious to try whatever they recommend. It’s also an appealing way for them to earn money. They’re going to be making recommendations, anyway, so earning a commission for them seems ideal. In most cases, everyone benefits from this symbiotic relationship.

You can make more sales while bloggers and influencers earn money off the content they’ve created. What started out as a way for small bloggers to cover their expenses has rapidly evolved into a multibillion-dollar industry. Many large digital media companies use affiliate marketing as their primary source of revenue.

Unfortunately, the large amount of money generated by affiliate sales leads some malicious actors to try to cheat the system and get paid for unearned commissions. This is affiliate marketing fraud, and it cost marketers about $1.4 billion in 2020.

The Negative Effects of Affiliate Fraud

effects of affiliate fraud

Affiliate fraud depletes your marketing budget and steals money from your effective affiliates. Aside from monetary losses, however, affiliate fraud has other negative effects, including the following.

False data

Most companies rely on their data to drive their marketing strategy. With so much value riding on your data, the false data generated by affiliate fraud can cause you to make bad business decisions. You won’t have an accurate picture of how well your marketing strategy is working and where you should invest more or less of your marketing budget. You also won’t know what messages truly resonate with your ideal customer or where your ideal customer is spending their time online.

Damaged relationships with true affiliates

Many types of affiliate fraud deprive your true affiliates (who are working hard to promote your products) of their commission. When these affiliates fail to make money with your affiliate program, they’re less likely to want to work with you in the future. Because these outlets may actually be more effective marketing channels, this not only unfairly penalizes them, but it also deprives you of a potentially lucrative marketing strategy.

How Affiliates Commit Fraud

affiliates commit fraud

Affiliate marketing is a type of performance-based marketing strategy in which affiliates are paid only when they generate sales. This model relies on a method of online tracking that can be used to attribute sales to affiliates so they can earn a commission. Affiliate fraud occurs when affiliates exploit vulnerabilities in these tracking systems to fraudulently collect commissions. This can be done in several ways, including the following.

Cookie stuffing

Many tracking programs rely on browser cookies. These provide a customized user experience while also tracking the device. Affiliates who commit fraud through cookie stuffing may place different cookies belonging to different advertisers on a visitor’s browser. If the visitor goes to any of the websites and makes a purchase, the affiliate will earn a commission, even though they had no part in generating the sale. This often cheats the true affiliate out of their commission, which can cause sites that actually boost sales to decide to stop participating in the affiliate program.

Sometimes, cookie stuffing is committed by a third party, and the website owner isn’t involved in the fraud. This can be done through malware installed with third-party software such as an extension. In one case, the CEO of a top affiliate marketer was sentenced to five months in prison for defrauding an e-commerce company out of $28 million.

Loyalty software

Another type of malicious software fraudsters use is placed on visitors’ computers to remind them about the possible benefits of buying from merchants. When the visitor tries to access the site directly, the software sends them through an affiliate link to generate a commission. The loyalty software will claim a commission even if the visitor isn’t enrolled in a loyalty program.

Typosquatting

Typosquatting is also referred to as URL hijacking. In this scheme, affiliates buy URLs that are closely related to a merchant’s URL, often using common misspellings. Whenever someone types in the misspelled URL, the affiliate automatically redirects them to the merchant through an affiliate link. This enables them to earn a commission based on a typo.

Attribution fraud

Attribution fraud is frequently used for app installations. The malware notifies the affiliate when a user has downloaded an app, and the affiliate then tricks the attribution software into crediting it as the last click before the app was installed. This falsely gives credit to the affiliate, making it look like the installations are coming through paid channels when they’re actually organic.

Affiliate Fraud Prevention

affiliate fraud prevention

Although there’s no way to completely eliminate fraud, there are steps you can take to detect and prevent it.

Verify your affiliates

Before you let someone sign up to be an affiliate, verify that they’re relevant to your target market. Implement an application process and manually verify their website and content before you grant them access.

Enable device fingerprinting

Fingerprinting is a process that lets you collect information about the device that lands on your conversion or sales page. You’ll get information about the operating system, installed toolbars, and browsers on visiting devices. With this data, you can identify devices and note whether there’s any suspicious activity.

Monitor affiliate analytics

By logging and monitoring your affiliate traffic, you can detect any suspicious activity. Once you have a pattern of activity, any anomalies will stand out.

Use testing software

One of the most effective ways to engage in affiliate fraud detection is by using specialized software. These testing bots automate the process and save you time and money. However, because they’re bots, they’re likely to get banned unless you use proxies. Proxies act as an intermediary between your device and the website you’re visiting.

The main way anti-bot measures work is by detecting suspicious activity based on IP addresses. Bots work much faster than humans, so when a website sees several requests coming from one IP address, the website flags it as a bot. When it does that, it blocks the IP address to cut off access to the site. Proxies prevent anti-bot technology from detecting your true IP address.

Using one proxy isn’t enough, however. As soon as your proxy IP address is associated with repetitive requests, it will get blocked. The best way to prevent detection is by using a rotating pool of proxies. You can send each request with a separate proxy IP address. This makes it look like multiple devices are sending one request rather than one device sending multiple requests.

The Benefits of Using Proxies

proxy benefits

There are several types of proxies, but the most effective type for detecting affiliate fraud is rotating residential proxies. These proxies originate from an internet service provider (ISP) and most closely mimic human activity. Proxies have a number of other use cases in addition to preventing affiliate fraud. Many enterprise customers use them for the following tasks.

Price scraping

When you’re trying to stay competitive, data on your competitors’ prices can give you the information you need to make informed decisions about your own strategy. With a web scraper, you can automatically collect price information from various online retailers and export it into a readable format.

Brand monitoring

Knowing what your customers are saying about your brand lets you understand what you’re doing right and what areas you need to improve on. Monitoring brand references also lets you deliver targeted customer service to stave off concerns and complaints.

Market research 

You can glean valuable information about your products or competitors’ products by scraping reviews. A web scraper can automatically collect reviews and sort them based on language. You can use this data to find out what features people like and which ones they don’t like as well as what products they don’t have but want.

Choosing a Proxy Provider

select best proxy provider

Proxies can be a tremendous asset in your corporate data strategy, but it’s important to choose a reliable proxy provider. Rayobyte offers the most reliable and authoritative proxies on the market. We’re committed to doing business ethically. Unlike many other companies, we make sure our end users grant full and informed consent for the use of their IP addresses.

Our residential proxies result in less downtime and fewer bans for all of your projects. They’re optimized for web scraping so that you experience more success. Our knowledgeable support staff is available 24/7 to provide technical help whenever you need it. Reach out today to find out how our team can help you achieve your goals.

Final Thoughts

conclusion on affiliate fraud

A comprehensive data strategy is essential to the success of your business. Unstructured data is available on a massive scale, but you need a method of collecting and analyzing it.

Collecting data on a large scale is a driver of business strategies on all levels. Regardless of what your use case is, proxies are an integral part of data collection. Although you can read about trends in your marketing reports, they often rely on stale and generic data. When you want specific, actionable insights, you can get them only by gathering the targeted data that you need yourself.

The information contained within this article, including information posted by official staff, guest-submitted material, message board postings, or other third-party material is presented solely for the purposes of education and furtherance of the knowledge of the reader. All trademarks used in this publication are hereby acknowledged as the property of their respective owners.

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