A Comprehensive Guide To Affiliate Compliance: How To Detect And Prevent?

In the dynamic landscape of digital marketing, affiliate programs have emerged as a potent strategy for companies to expand their reach, drive sales, and increase revenue streams. 

However, like any innovative venture, the world of affiliate marketing comes with its own pitfalls. In a realm where potential profit is high, the presence of a few adept scammers can swiftly erode the profitability of an affiliate campaign. The technical effectiveness of these malicious affiliates often surpasses the understanding of the very companies they target, enabling fraudulent activities to be established. 

This comprehensive guide takes you to shed light on the world of affiliate compliance, with a specific focus on the deceptive tactics of the threat actors. By diving deeper into affiliate abuse, its effect on businesses, and strategies for detection and prevention, this guide aims to empower advertisers to navigate the treacherous waters of affiliate marketing with confidence and assurance. 

Guide To Affiliate Marketing Compliance 

Violations Of Paid Search Policy 

One of the most prevalent forms of affiliate fraud emerges from the violation of a company’s paid search policy, often taking place through trademark bidding. Often, many Terms of Service agreements of a company explicitly dictate that affiliates are prohibited from bidding on terms trademarked by the company. Nevertheless, the threat actors continue to flout this rule, employing increasingly sophisticated methods to conceal these violations from advertisers. Brand bidding, a prevalent tactic, involves affiliates bidding on keywords containing the company’s trademark, often leading to unauthorized attribution of sales. 

Reverse IP-Geo Targeting and Dayparting 

In order to evade detection of paid ad violations, affiliates often resort to the cunning tactics of reverse IP-geo targeting and day-parting. The principle here is simple: by showing ads in places where merchants are less likely to monitor, affiliates can have unwanted surveillance. For example, let’s assume a clothing brand, “ABC,” has headquarters in Texas, so if an affiliate promoting coupons for ABC could set their ads to display everywhere except for Texas. This tactic would ensure that if an affiliate manager from ABC searches for “ABC Coupons” in the Texas location, they will see no unwanted ads. This approach can create an illusion of compliance while unethical activities remain hidden. 

Moreover, affiliates delve even deeper into this strategy by leveraging time-based targeting. The concept of day-parting revolves around displaying ads during specific times of the day when monitoring activity is expected to be minimal. For instance, if the corporate hours of ABC’s affiliate management team fall between 9 AM and 5 PM, a malicious affiliate might schedule their ads to run between 2 AM and 4 AM. This deceptive practice further obscures any traces of suspicious activity. 

Disposable URLs And Front Websites 

Affiliates looking to avoid traditional monitoring mechanisms have adopted increasingly advanced tactics, with disposable URLs and front websites taking the spot. These techniques are designed to hide the true identity of the affiliate, making it exceedingly difficult for advertisers to trace their activities back to the source. 

The operation of this technique is simple yet deceptive. Affiliate purchases ads using disposable URLs, URLs they wish to discard after a short period of time. When a user clicks on the ad, they are directed to this disposable URL. The user is then redirected to a “front” website. This website serves as an intermediary, effectively masking the original referral source before ultimately leading the user through an affiliate link. The complexity of this process creates a disconnection between the data visible on search engines and what is visible to the advertisers, further complicating the detection of malicious activities. 

Auto-Redirects 

The auto-redirect process adds an extra layer to the intricate web of deception. By redirecting users through a middleman, affiliates cleanse the user’s referrer information before directing them to the merchant’s website. This manipulation masks the fact that the user’s journey began with a search ad, making it appear as though the user originated from the front website. This way allows affiliates to portray the traffic as per affiliate-generated value, obscuring the true source. 

Cookie Stuffing 

Cookie-stuffing, a cunning technique employed by rouge affiliate marketers, overthrows the standard affiliate marketing model, relying on cookies to trace users’ paths to an advertiser’s website. Traditionally, advertisers reward affiliates when a user navigates from the affiliate’s site, clicks their designated link, and subsequently completes a purchase. With each click of an affiliate link, a cookie is deposited in the user’s system, enabling the advertiser to pinpoint the user’s origin and allocate the rightful commission to the respective affiliate. In many programs, a 30-day return window allows affiliates to receive credit if the user returns to make a purchase within the specified timeframe. 

However, the deception inherent in cookie stuffing lies in affiliates manipulating advertiser’s tracking systems. Through this method, these affiliates implant cookies onto the users’ systems without their consent or acknowledgment. Consequently, these affiliates illicitly reap commissions from unsuspecting users’ purchases without ever promoting the merchant or driving meaningful traffic. 

Forced Clicks 

Forced clicks, a deceptive affiliate tactic, often hinge on the manipulation of unsuspecting visitors to affiliate sites. One of the more common methodologies involves the use of JavaScript embedded within the front webpage. When a user navigates to the affiliates’ site, this JavaScript compels the user’s browser to load an affiliate link. Remarkably, this action alone is enough to plant cookies onto the user’s computer. Subsequent purchases made by the user from the associated advertiser within a specific timeframe are then wrongly credited to the affiliate, all without the user’s conscious engagement. 

The intricate mechanics of the technique often involve the discreet presence of an invisible iFrame on the website. This iFrame hosts the affiliate link, which, when loaded in the background, effortlessly deposits cookies onto the user’s system. This approach creates a facade where users remain unaware of their role in the affiliate’s unethical gain. 

Plugins such as CPA Redirector, CookieFire, and Chocolate Chip Cookie Stuffer present affiliates with simplified avenues to orchestrate forced clicks directly from a WordPress page. These plugins enable affiliates to bypass the need for users to click on an ad or link. Instead, more page visits trigger the forced click mechanism, leading to commissions for any future purchases made by the user from the advertiser. 

Banner Advertisements 

The interplay of banner ads and affiliate links introduces an unforeseen dimension to practice cookie-stuffing. This method is applied by affiliate marketers by inserting affiliate links within banner ads, allowing them to silently drop cookies into users’ browsers as they interact with these ads. This strategy takes advantage of users’ routine browsing behavior, making it possible for affiliates to earn commissions without any explicit engagement on the users’ part. 

What sets this approach apart is its disruptive nature. Through this method, affiliates reap commissions without necessitating users to click on any link or visit their website. This contravenes the conventional affiliate marketing model, wherein commissions are typically attributed to actions involving explicit clicks, interactions, or purchases influenced by the affiliate’s efforts. 

Image Cookie Stuffing 

Image cookie stuffing refines the affiliate fraud of dropping cookies into users’ browsers by exploiting the way browsers handle image files. In this model, an affiliate ingeniously employs an affiliate link as the source of an image file, which is then discreetly placed on a website. 

When a browser encounters this image link, it diligently follows the path and reads and processes cookies even if the image itself fails to load. The resulting display in the browser can range from a broken image icon to a canvas-like blank space. 

The power of image cookie-stuffing is derived not only from its effectiveness on an affiliate’s website but also from its potential to target vast volumes of untapped free traffic. This practice finds particularly fertile ground in online discussion forums, where the tactic can be employed through image links embedded in users’ signatures. 

By adopting this approach, every user who views a post created by the affiliate inadvertently has affiliate cookies deposited in their browser without any interaction required. This method also bypasses the need to direct users through a link or to the affiliate’s site, essentially enabling forced clicks without incurring advertising costs. 

Image cookie-stuffing finds its way into various corners of the internet, from social media profiles to online marketplaces. Abusive affiliates capitalize on platforms like MySpace profiles, eBay auctions, and Craigslist ads, creating web pages where they discreetly embed image-based affiliate links. 

In doing so, they execute a virtual deception, coercing browsers to accept cookies as unsuspecting users encounter these seemingly harmless images. The implications are far-reaching, as any subsequent purchases made by these users on the targeted advertiser’s site - within the given timeframe go to the fraudulent affiliate.

Detecting And Combating Cookie Stuffing 

Detecting potential instances of cookie stuffing requires a sharp eye and a willingness to explore unconventional methods. This approach stands out as an effective means to unmask these deceptive practices:

Automated Monitoring 

Utilize monitoring software designed to automatically detect irregularities in affiliate behavior. This approach can serve as an early warning system, flagging suspicious activities for manual investigation. Equip your affiliate marketing management with strong technical expertise. This background will enable your team to dissect complex methods employed by deceptive affiliates, staying one step ahead of their evolving tactics. 

Malware And Adware  

Malware and adware encompass a range of nefarious programs, including spyware, pop-ups, and pop-unders. What sets these programs apart is their functionality; they often infiltrate users’ computers without explicit knowledge or permission. Once installed, they operate in ways to funnel traffic toward affiliates, often at the expense of honest affiliates who adhere to ethical practices. 

The mechanics of malware and adware are multi-faceted and designed to maximize gains for unscrupulous affiliates. This software tracks users’ online online activities, providing the affiliate with sensitive insights into user behavior. Armed with this information, affiliates can target users more precisely. This precision often manifests in the form of ads or browser windows that engage in the form of cookie-stuffing, swiping commissions, and credit from rightful parties. 

These practices not only disrupt the symbiotic relationship between affiliates and merchants but also erode the trust that is the bedrock of affiliate marketing. Honest affiliates who diligently adhere to ethical practices find themselves at a disadvantage as their efforts are overshadowed by the manipulative tactics of those who engage in malware and adware campaigns. 

Combating Malware and Adware 

Effective countermeasures against malware and adware require an approach that combines advanced technical methods with stringent affiliate monitoring. For many organizations, partnering with seasoned consultants who operate specialized malware labs is a strategic move. These experts possess the skills and tools required to meticulously analyze affiliate behaviors, detect hidden scripts, and identify telltale signs of malware and adware. 

Along with this, maintain a rigorous screening process for affiliates seeking entry into your program. Establish clear criteria and vetting procedures to ensure that only trustworthy affiliates are approached. By setting high standards, you can significantly reduce the likelihood of malicious affiliates infiltrating your network. 

Implement a real-time monitoring system that can detect unusual patterns of behavior among affiliates. Deviations from established norms can be an early indicator of potential malware or adware activities. 

Typosquatting 

Typosquatting is a subset of domain parking - a practice where domains are purchased for the purpose of financial gain. The concept revolves around acquiring domain names with slight variations from major businesses’ trademarked domains. For instance, in the case of legitimate domain www.example.com, typosquatted variations could be wwwexample.com, exampl.com, or xample.com. 

The underlying premise is that users, typing hastily into URL fields, often commit typographical errors that land them on a typosquatter’s domain rather than the intended original domain. These users, originally seeking the merchant’s website, inadvertently provide fertile ground for conversion. It’s the user intent that affiliate hijackers seize upon, converting these users into profitable customers at the merchant’s expense. 

Pay-Per-Click Advertisements 

The primary mechanism employed by typosquatters is pay-per-click advertising. These malicious domains partner with major ad platforms like Google Adsense for Domains to display ads and profit from ensuring clicks. A typical setup features the top ad on the typo-squatted site promoting the genuine merchant’s website, giving the illusion of legitimacy. Below this ad, however, lie ads for competitors, further ensnaring unsuspecting users. 

When users click on the intended ad, they not only pay the ad platform but also unknowingly reward the owner of the mispelled domain. This duplicitous cycle diverts resources from the legitimate merchant, amplifying the insidious nature of typosquatting. 

Redirections 

One common ploy involves affiliates setting up redirects on typosquatted domains. As users navigate to these domains, the affiliate swoops in to set a cookie on the user’s browser during the redirection process. This seemingly innocuous maneuver falsely attributes credit for a sale that was bound to occur naturally. Advertisers unwittingly end up paying commissions on organic sales, while affiliates bask in the glory of inflamed conversion rates. What seems like an innocuous typographical error becomes a means to siphon unjustified commissions. 

Diverting to Competitors 

Another way these threat actors receive unearned commission is by redirection to competitors. These cunning affiliates exploit users’ intentions to make purchases by redirecting them to sites offering similar services, often with slightly altered domains. Users, unaware of the detour, end up making their purchases from competitors rather than the intended advertiser. This creates chaos in the affiliate marketing ecosystem, distorting user intent and leading to sales that would have otherwise rightfully belonged to the advertiser. 

Misleading Deals 

Misleading deals a varied strategy, hold the potential to unlock new dimensions of engagement and conversions for affiliate marketers. This approach covers an array of marketing activities that offer users incentives, other financial, for taking specific actions. The forms of misleading deals are as diverse as the platforms that employ them:

Couponware

Couponware enters the affiliate marketing arena as a vehicle of incentivization, luring users with the prospect of financial benefits. Often positioned as a money-saving tool, couponware declares clients discounts, cash back, and charitable contributions across a broad spectrum of online shopping platforms. Its allure lies in its apparent win-win nature, where users benefit from monetary incentives, and affiliates stand to profit from their engagements. 

The couponware experience unfolds through a combination of technology, cookies, and user interactions. 

Upon downloading couponware, users activate a browser toolbar that remains ever-present during their online browsing. The toolbar springs to life each time a user accesses a site connected to the program’s affiliate link. In a specific scenario, the toolbar discreetly sets a cookie upon detecting affiliate-linked sites. This cookie informs the advertiser that the sale is attributed to the affiliate, even if the user’s visit was organic in nature. 

Alternatively, the toolbar displays messages to users, enticing them with discounts and offers if they leave the site and return via the affiliate link. This ingenious manipulation suggests to the advertiser that the sale arrived through affiliate intervention rather than organic search. 

Some couponware variants overlay coupons directly onto the merchant’s site, setting cookies in the process. This again steers the merchant into recognizing the affiliate’s role in the transaction, ultimately impacting commissions. 

Impact Of Couponware On Advertisers 

Couponware’s apparent convenience for users carries crucial misdemeanor for merchants within the affiliate marketing ecosystem. 

Misdirection of traffic

Couponware often redirects organic traffic through affiliate links. This maneuver unfairly compels merchants to pay commissions for transactions that would have otherwise occurred naturally. 

Overwriting Affiliate Cookies 

A darker side of couponware emerges as some instances overwrite existing affiliate cookies with their own, manipulating attribution and stealing commissions from legitimate affiliates. 

Unclear behavior 

The behavior of couponware, particularly in overwriting cookies and automatically setting cookies, might not always be transparent to the affiliate, leading to potential misunderstandings and conflicts. 

Affiliate Marketing Fraud Detection and Prevention 

Crafting a Comprehensive Terms of Service Agreement

A well-drafted Terms of the Service agreement is the cornerstone of a secure affiliate program. This agreement sets clear guidelines for affiliates and establishes the foundation for legitimate marketing practices. Key components of a robust ToS agreement include:

Negative Keywords in PPC Campaigns

Prevent brand bidding in paid searches by requiring affiliates to use your brand terms as negative keywords. This prevents ads from appearing on searches containing your brand and ensures accountability for brand protection.

Trademark Usage Restrictions

Prohibit affiliates from using your trademarks in domain names, subdomains, usernames, etc. This measure safeguards your brand's identity and prevents potential infringement disputes.

Incentive Marketing Guidelines

Clearly outline the types of incentive marketing that are allowed and those that are not. This prevents affiliates from using unethical tactics to drive sales.

Disclosure Requirements

Affiliates must disclose their relationship with your company, especially when writing reviews. Transparent disclosure maintains trust and complies with regulations.

Content Restrictions

Identify prohibited content, such as adult or hate-speech content, to ensure your brand's reputation remains untarnished.

Payment Delays and Withholding

Grant yourself the right to delay payments to investigate potential fraud. This ensures you have the time to gather evidence and take necessary actions.

Detrimental to Brand Clause

Include a broad clause that prohibits campaigns detrimental to your brand, offering protection against evolving forms of affiliate abuse.

Comprehensive Fraud Prevention Program:

While a well-crafted ToS minimizes risks, comprehensive fraud prevention requires ongoing efforts:

Affiliate Application Reviews

Thoroughly review affiliate applications. Request interviews or additional information to identify suspicious affiliates and reduce potential risks.

Regular Communication

Maintain open communication with affiliates. Regular interactions provide insights into their practices and intentions.

Abuse Monitoring

Continuously monitor affiliate activities. Look for irregularities or suspicious patterns that might indicate fraudulent behavior.

Payment Delays for Accountability: Implement payment delays as a deterrent and a tool for distinguishing ethical affiliates from fraudulent ones.

Approving Affiliates with Care:

To prevent abusive affiliates from entering your program, adopt a careful approach to approving applications:

Avoid Auto-Approvals

Refrain from using auto-approve features that grant instant access to affiliates. Auto-approval can attract abusive affiliates who exploit under-monitored programs.

Conduct Interviews

Interviewing potential affiliates deters those with malicious intent. Fraudulent affiliates may be reluctant to engage in direct communication.

Engagement Post-Sale

Contact affiliates after their first sale to evaluate their brand presentation and methods. This helps identify any suspicious practices.

Auto-Response Email

Request additional information from applicants through an auto-response email. This additional step deters less committed or dishonest affiliates.

How To Keep Your Affiliate Program Fraud-Free?

Keeping your affiliate program fraud-free takes proactive steps in the right direction. By partnering with Virus Positive Technologies (VPT), businesses can ensure affiliate fraud protection. Many renowned brands rely on VPT’s services for utmost compliance in their affiliate programs. 

We provide high-end affiliate management services that help organizations identify frauds like cookie stuffing, redirections, and coupon fraud, eventually saving costs and improving brand reputation. 

By embracing our strategies, you can create a safer and more productive environment for both your company and your valued affiliates. So, what are you waiting for? Contact us today.