Affiliate Fraud and Brand Protection: Gaurav Sethi, Q&A with Virus Positive Technologies

In this Q&A exclusively written for ExchangeWire, Gaurav Sethi, co-founder and CEO of Virus Positive Technologies, discusses affiliate marketing and how brands can solve the serious problem of affiliate fraud.

How common is the affiliate scam problem and why is it on the rise?

Fraud in digital marketing is nothing new and has long worried the world’s leading brands. The direct cost of ad fraud $35 billion (£2.7 billion) in 2020and current estimates, $44 billion (£33 billion) with $68 billion (£51.7 billion) At the end of this year.

As of 2016 80% of advertisers While adopting affiliate marketing as part of their core marketing strategy, 8 out of 10 brands run affiliate programs. Accounting for the environment 15% of total revenue from the digital media industryAffiliate marketing is not immune – several brands have been victims of affiliate scams in the past, and even today, the extent to which bad actors find loopholes and maliciously influence networks has remained the same.

Because affiliate marketing is not industry specific and is one of the most used marketing channels in all industries, affiliate scams threaten all online businesses, especially those within the e-commerce industry. Our teams have identified more than 20 different types of scams in affiliate marketing, and bad actors may develop new ways to use this space in the future.

What are brands doing right now and what else can be done to reduce the threat of affiliate marketing scams?

Gaurav Sethi, co-founder and CEO of Virus Positive Technologies

Digital marketing leaders have become more adaptable to the frequent changes in the marketing industry. They are proactive in ensuring that the marketing agencies and affiliate networks they partner with adhere to best practices and retain online customers.

The last decade has witnessed an increase in the scope of brand monitoring and affiliate fraud detection solutions, and in the post-covid world I only foresee steep growth in the coming years. However, there is a serious need for the industry to be aware of the malicious tactics used by affiliate scammers to deceive consumers and tarnish the reputation of brands. More education is needed on the impact of affiliate fraud on brands, and that is something we aim to provide at Virus Positive.

Advertisers can adapt in a number of ways to protect their brands from affiliate scams. My advice to advertisers is to look at options that fit their marketing strategy and needs. Two resources that I will particularly highlight:

  1. Affiliate network monitoring solutions to monitor the activities of all affiliates in the network.
  2. Brand compliance monitoring solutions ensuring that promotional methods used by affiliates comply with internal and external guidelines.

Implementing better quality control measures and creating smart business logic to automatically flag suspicious activity by affiliates also requires intense consideration.

Are brands most vulnerable to scammers right now?

The United States has a large 39% share of the global affiliate industry, with a domestic market of $6.8 billion (£5.2 billion). Japan is second on the list with a market capitalization of $3.3 billion (£2.5 billion), followed by Germany, Australia and the UK at third, fourth and fifth places, respectively.

With the largest market share in affiliate marketing and marketing spend in general, the US is naturally the target market for affiliate networks. It is also most at risk of fraud and has recorded the highest loss from advertising fraud. $11.4 billion (£8.7 billion) Getting lost in the hands of bad actors in 2020 and beyond $23bn (£17.5bn) expected to be lost in 2022.

Over the years, we have noticed a significant increase in ad fraud and the methods that malicious affiliates are adopting to deceptively accrue commissions. In 2012 there were only a few methods used to deceive advertisers; Now, ten years later, there are more than 20 types of affiliate scams, including cookie insertion scam, adware scam, web push-ad scam, click fraud, and coupon fraud.

What do you think the future will be for affiliate marketing and will the industry be able to eliminate affiliate fraud in the years to come?

I have been in the advertising technology industry for over 15 years. I’ve seen how affiliate marketing has turned into a lucrative marketing channel and serves as a win-win model for advertisers and publishers alike. Based on my background and knowledge in the affiliate marketing industry, I predict the digital industry will grow significantly in the future.

There is a significant need for advanced monitoring programs that offer marketers the opportunity to get the best results in their digital operations and root out bad actors. Brands lose out in their affiliate marketing efforts due to poorly managed tracking mechanisms, but with the right solutions, they can generate additional revenue without falling into the trap of cybercriminals.

Affiliate marketing serves as a direct business-to-customer marketing model and involves many parties, so it is not always prudent to assume that affiliate fraud will be wiped out from the market. However, by constantly monitoring and monitoring the activities of their affiliates, companies can reduce the risk of exposing their customers to affiliate fraud.

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