Are Competitor Ads swindling your marketing budgets?

Table of Content

• Introduction
• What are Competitor Ads?
• What is Competitor Ad affiliate fraud?
• How do malicious affiliates deceive advertisers? 
• How do you prevent your customer journey hijacking?
• Conclusion

Introduction

Advertising is the medium of reaching customers and influencing their buying behaviors. Over the years, advertising has evolved from traditional media like print & TV to online and digital platforms. With a whopping 59.5% of active internet users in 2019, digital media advertising reserves ample space in the medium to reach out to consumers. 

When we mention digital advertising, affiliate marketing holds an undoubted mention. Statistics have revealed that more than 80% of brands globally use affiliate marketing to attract customers. The image below shows key statistics of the global advertising industry. 

Image Source

The popularity and exponential increase in affiliate marketing are related to this channel's payment model. The fact is not unknown that affiliate marketing forms the only channel where anyone, anywhere in the world, can use their platform to promote the brands and earn commissions for getting legitimate traffic for the brands. 

This lucrative payment model makes affiliate marketing most attractive for fraudsters to dupe the advertisers and consume their marketing budgets, hitting their brand reputation. The customers are also at the losing end as their information is vulnerable to fraudsters. 

In this blog, you can learn more about one of the common affiliate traps – Competitive Ads Fraud. 

What are Competitor Ads?

Marketers are always looking to grab more and more users for their businesses. The most tempting and easy target is the existing users of their competitors. To get the attention of such users, marketers use different methods. 

Competitor Ads are all the digital advertisements displayed either by bidding on competitor keywords or displaying ads on the competitor ad space like their websites. 

Competitor ads are ad campaigns targeting your competitor's brand names. These campaigns allow your business to show up when a customer is searching actively for a competitor, putting your name in front of more people who need the services or products you provide.

In Affiliate Marketing, Competitor ads are the ad campaigns displayed mainly on the competitor's websites. Now, you may be wondering how does that happen? Welcome to the world of Affiliate Marketing Fraud!

What is Competitor Ad affiliate fraud?

Malicious affiliates have discovered several ways of duping money out of advertisers' pockets. Competitor Ad fraud is just one such affiliate trap. 

In the digital era, companies have been trying to enhance and ease shoppers' online experience. Tools such as browser extensions and plugins help shoppers make the most of their online shopping. Shoppers download and use extensions to find coupons and compare prices to make an intelligent purchase. These prove to be of extreme use to the shoppers and make their online buying journey smooth and worthwhile. Malicious affiliates use such downloadable tools as Adware to inject ads, and cookies and collect other user information. 

Once Adware gets downloaded in a user system bundled up with one of such browser extensions or plugins, the affiliates can then access the user's system, browsing history, personal data, and other confidential information. 

One such common affiliate trap involves fraudulent affiliates displaying ads from competitors on the home page or product pages of a brand's website. These are advertisements for similar products or services that the user was looking for but from a specific brand. As per a recent study, the average cart abandonment rate across all industries is 75.6%. 

Here is an example to understand more about this topic– 

An online shopper looking to buy clothes downloads a browser extension providing shopping coupons. He then visits one of the famous shopping websites Guiseme.com and starts browsing for clothes. 

How your website should look to your shoppers

When the shopper lands on the product page of their chosen item, they start seeing advertisements from the competitors of Guiseme.com. These ads are lucrative and provide competitive prices or discounts. 

How it actually looks to your shoppers

When the shopper clicks on these ads, he gets redirected to the competitor's website, and the brand loses its customer. And the worst part is, Brands are not even aware of what their customers are seeing while on their websites. 

How do malicious affiliates deceive advertisers? 

The malicious affiliates intend to accomplish their nefarious goals by getting involved in fraudulent acts. There are several goals that they achieve by deceiving the advertisers. A few scenarios of these are below: 

1. Commissions for every action

In a CPA or pay-per-sale model, affiliates get tempted to focus on increasing the advertisers' sales as they only get commissions for the converted sales. The shoppers looking for similar products are the easiest to target as the conversion chances are high. They use downloadable tools to distribute Adware on the user machines and hijack their browsers to display web Push notifications, stuff affiliate cookies, show competitor ads, and more. Brands face a decline in their conversions as their customers are diverted to the competitor's website with compelling offers. 

2. Commissions for impressions

In a CPM or CPI model, affiliates earn commissions to display the brand's ad campaigns and drive user impressions for their ads. Advertisers pay the affiliates for each impression or per thousand impressions. Malicious affiliates make fake impressions by using Adware to display the brand's advertisements on the competitor's website and illegitimately drive users. 

3. Commissions for clicks

In a Cost-Per-Click model, affiliates get paid for each click they drive to a brand's ad campaigns. Competitor ads placed on a brand's website steal their customers, and competitors pay commissions for the clicks made on their ads. 

How do you prevent your Customer Journey Hijacking?

Virus Positive Technologies ad fraud detection solutions can monitor, track, and analyze affiliates' activities in your network. We understand and realize that each customer is unique and on their journey. Our solutions and services track the activities of your affiliates and detect any act of hijacking your customer's shopping journey. We have helped brands recover 90% of their stolen revenue and continuously help keep their network safe. Connect with us at sales@viruspositive.com.