Affiliate Marketing = Fraudulent in 2022
If you read some of the latest data surrounding the extent of affiliate fraud, you might have questions.
In 2020, nearly 10% of traffic coming from affiliate marketing programs was fake. Now, in 2022, that number has almost doubled (17%), which means the affiliate industry is expected to lose over $3.4 billion in fraud this year.
How can this be? What's going on? As someone who has run a $200 million/year affiliate network, and owned one of the first CPA networks in the world in 2000, I have some significant insight into what is going on.
The simple answer is that affiliate fraud has become more sophisticated and harder to detect. Bad actors are using increasingly sophisticated bots to generate fake traffic, and they're becoming very good at it. In fact, they're so good that even some of the largest affiliate networks have been duped.
So what can be done? The affiliate industry needs to get better at identifying and filtering out bad traffic. But that's easier said than done. In the meantime, if you're an affiliate marketer, it's important to be aware of the risk of fraud and take steps to protect yourself.
Research from CHEQ, a cybersecurity firm, revealed a wide array of bots and human-malicious traffic being driven by affiliate partners, including botnets, click farms and automation tools.
Guy Tytunovich, Founder and CEO of CHEQ says,"Affiliate marketing has unfortunately become synonymous with fraud and fake traffic…
It's no longer a question of 'do I have fraud', it's only a question of how much.”
Who should you be worried about? Here's a huge hint, stop working with people that the FTC has gone after. They have proven themselves to be fraudsters, they have proven themselves to be scammers. Make sure if you're in the industry, these companies are on block lists, and that you'll never work with them.
Two folks even sued by the FTC have even received "awards" from Affiliate Summit for their "contributions." I want you to think about this: someone so fraudulent that the FTC sued them for millions of dollars, received an award for "contributions" to the affiliate industry.
This means that the industry celebrates frauds, celebrates scams and honors the people the rest of the industry would never normally do business with.
However, if you're involved in affiliate marketing, someone is brokering your offer, your product to someone who is scamming someone. The FTC proved it.
This is guaranteed, because the industry is accepting of frauds and promotes them because they pay the bills.
Because that's their business model. Period. They depend on the 20% or so of fraud to be competitive, and to make money.
That's why there are only a few companies I recommend that anyone work with: those with an established company, have never been targets of the FTC and have taken proactive action to prevent fraud by not allowing "brokers" to take it to scam networks.
While this is a staggering number, it’s not surprising when you consider how affiliate marketing works. Essentially, affiliates are rewarded for driving traffic to a merchant’s site, and as the industry has grown, so too has the amount of fraud. Unfortunately, this means that merchants are losing out on billions of dollars in potential sales each year. What can be done to combat this problem?
There are a few things that need to happen in order to reduce the amount of affiliate fraud.
Affiliates need to be better educated about what constitutes fraudulent activity and how they can protect themselves from being scammed.
Merchants also need to invest in better technologies that can help them detect fake traffic and identify malicious actors. Analytics is the only way to go here, most fraud solutions for "affiliate marketing" are nothing but frauds.
Finally, networks need to stop brokering to third party networks. This is common except for a few notable companies.
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ALL YOU NEED TO KNOW, CONDENSED ('CAUSE YOU DON'T HAVE THE TIME!)
1. Global advertising revenues are expected to grow 9% year-on-year to $816 billion in 2022, according to the latest forecast from Magna. That’s down from a prior projection of 12% growth, but still healthy in the face of a swirl of broader macroeconomic uncertainty. The U.S. and
China will remain the two largest advertising markets in the world, with ad dollars expected to reach $265 billion and $176 billion respectively by 2022. However, it’s worth noting that China’s ad market is forecast to grow at a much faster clip than the U.S., expanding by 17% annually over the next five years compared to just 4% growth in the States. Digital formats will continue to claim an ever-greater share of total ad spending globally, reaching 54% by 2022 on the back of strong growth in
mobile and video advertising. Search will remain the most valuable form of digital advertising, while social media will see the fastest growth. All told, Magna projects that global digital ad revenues will rise from $487 billion this year to $696 billion by 2022.
2. Google’s parent company Alphabet will allow rival advertising intermediaries to place advertisements on YouTube as part of a European Union (EU) antitrust investigation. This change, according to Reuters, could help Google settle an EU probe from last year without paying a fine. The EU launched its investigation after Google refused to give rivals equal treatment in how their adverts are displayed. At the time, Google said that it would not
give preferential treatment to any one company over another. However, the EU said that this was not enough and that Google was using its dominance in the online search market to stifle competition. If Google agrees to allow rival ad intermediaries to place ads on YouTube, it would be a significant concession. However, it is not clear whether this would be enough to satisfy the EU. A decision is expected to be made later this year.
3. Apple held its much-anticipated Worldwide Developers Conference (WWDC22) last week, and as usual, they did not disappoint. The tech giant made a number of announcements that are sure to have a big impact on the marketing world. First, they unveiled a new tool called AppTrackingTransparency that will give users more control over how their data is used. This is a big win for privacy advocates, and it
could have a major impact on how advertisers target consumers. Second, Apple announced a new feature for Siri called Proactive Suggestions. This will allow Siri to suggest relevant information to users based on their current location and past behavior. For example, if you're near a coffee shop that you frequently visit, Siri might suggest ordering your usual drink. This could be a powerful tool for marketers who want to target nearby consumers with
relevant offers and information. Finally, Apple announced some updates to its iMessage platform that will make it easier for businesses to interact with customers. These include the ability to send group texts and use third-party apps within iMessage. With these new features, businesses will have even more ways to reach and engage with their customers.
4. Affiliate marketing is tipped to hit $8.2bn by the end of 2022, with as many as 80% of brands likely to be using affiliate campaigns this year. And driving this growth are the twin powers of ecommerce and messaging, with DCB and RCS both set to have a huge impact. These two technological advances are making it easier than ever for brands to reach their target audiences, and they're also providing new opportunities for affiliates to earn
commission. With more and more brands turning to affiliate marketing to reach their goals, it's clear that this form of marketing is here to stay. And with the continued growth of ecommerce and messaging, there's no doubt that affiliate marketing will continue to grow in popularity in the years to come.
5. Earlier this week, LinkedIn launched a new ad campaign aimed at highlighting the power of community on the platform. The campaign, which is titled “#InItTogether”, features a series of videos and articles which demonstrate how LinkedIn can help users to connect with others in their field, and how those connections can be used to support career growth. In one video, for example, LinkedIn members discuss how they have used the platform to find
mentors, collaborators, and even jobs. The campaign also includes a series of articles which offer advice on topics such as networking and building your personal brand. By showcasing the different ways in which community can help to guide users in their career progression, LinkedIn’s new ad campaign makes a strong case for the value of the platform.
6. FTC losing tons of staff: Last year, when President Biden nominated Lina Khan to lead the Federal Trade Commission, progressives thought they had their dream pick. Khan is a wunderkind legal scholar and critic of Amazon who made a name for herself prior to her Elizabeth Warren-backed confirmation as FTC Chair. However, according to The Post, Khan's management style is leading to staff discontent and risks derailing her ambitions. Khan is said to be a demanding boss who expects her
staff to work long hours and weekends. She is also said to micromanage her team, requiring them to keep meticulous notes and track of every minute detail. As a result, many staffers are said to be exhausted and demoralized. If Khan doesn't change her management style, she risks losing the support of her team and derailing her own ambitions.
7. A recent study has found that a significant percentage of impressions delivered through CTV streaming devices are delivered when the TV is shut off. According to the study, 17% of impressions delivered through devices such as dongles, gaming consoles, and sticks were delivered when the TV was shut off. This means that people are being exposed to advertising even when they're not actively watching TV.
The study also found that these impressions are typically less than 30 seconds in length. This is concerning because it suggests that people are being repeatedly exposed to short bursts of advertising even when they're not engaged with the content. This could have a negative impact on people's perceptions of the brands being advertised. It's also possible that this exposure could lead to people feeling more tired and less engaged with the content they are watching. The study highlights the need
for more research into the impact of CTV advertising on viewers.
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The Watercooler
Impress your Co-Workers with these useless facts about marketing
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Aiste Lenartaviciute, Marketer at MailerLite
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