The Rising Threat of Affiliate Fraud and How to Protect Your Business: Part 2 of 3

This is the 2nd in a series of 3 guest blogs from IPQS, the fraud prevention experts who help LinkTrust clients combat affiliate fraud and safeguard marketing budgets

Advice For Businesses to Mitigate Costly Fraud

To help businesses prevent affiliate fraud from negatively impacting their revenues and customer relations, here are four key steps to follow:

Step 1: Choose the Correct Incentives for Your Partners

The most popular measure used in digital advertising is cost per impression (CPI). However, in a world of prolific bots and fraud this can distort campaign measurement and translate into large losses. This is why cost-per-action (CPA) strategies are more effective in tracking.

Also, marketers need a strong attribution model that goes beyond last-touch attribution, to be able to credit or incentivize the partners who are driving brand awareness and downstream conversions.

Step 2: Filter Traffic in Real Time

Businesses must monitor and filter incoming traffic to eliminate bogus traffic in real-time and prevent wasted budgets and misleading campaign results. While conducting ongoing campaigns, businesses should understand the true source of the traffic and use risk-based scoring to identify dubious traffic. This real-time filtering ensures that fraudulent activities never manipulate the budgets or lower the CPC rates.

Step 3: Profile the True Geolocation of Traffic

Fraudsters frequently spoof their locations and use VPNs to conceal bots and high-risk connections. Also, affiliate marketing campaigns that have higher incentives for engaging users in more lucrative economies can be undermined by location spoofing for monetary gain.

Still, some genuine customers connect to sites using VPN connections so businesses must understand the full risk profile of the traffic before blocking outright. Defining the validity of an IP address is a dynamic process – IP addresses of mobiles and legitimate residential proxies get compromised daily to act as proxies for carrying out fraud.

Step 4: Score Traffic Based on the Likelihood of Fraud

Effective fraud scoring gives instant insight into high-risk activities. Fraud scoring should be based on deep expertise, experience, and accurate data. This comprehensive approach enables you to make informed, real-time decisions, protecting your budget and ensuring your resources are effectively allocated. By identifying and filtering out partners not serving your best interests, you can streamline your operations and focus on what truly matters.

Integrating machine learning into the risk-scoring process takes this a step further. Machine learning continuously analyzes vast amounts of data, identifying patterns and trends that traditional methods might miss. This advanced technology helps you avoid potential threats, ensuring that only the safest, most reliable traffic is accepted.

Schedule a demo to learn more about how LinkTrust’s integration with IPQS solutions can safeguard your business.

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