For anyone running affiliate marketing programs, combating affiliate fraud is a top priority. As of August 2020, affiliate marketing had already generated $15 billion in revenue, but at least 9% of those transactions were affected by fraud, according to CHEQ. On their blog, the company writes that this is a highly conservative estimate and that “many marketers report finding much larger percentages of fraud in their affiliate programs.”
To support your efforts to build an effective fraud management process, we look at several CAKE features that will help ensure your acquired sales are authentic, valid, and profitable. As you get serious about identifying and stopping fraud, you’ll not only protect revenue, but you’ll also build trust that leads to long-term, lucrative relationships with your advertisers and affiliates.
What is affiliate fraud?
Affiliate fraud can take many forms, but in all cases, you’re dealing with an affiliate stealing attribution on a conversion that wasn’t generated by them so they can receive payment. As the network or advertiser, you end up paying for what should have been an organic conversion or a conversion generated by a different source.
Because CAKE collects data on such a granular level and gives you ongoing transparency into that data, we’re able to arm you with powerful tools that expose fraudulent activity and notify you of suspicious traffic patterns and affiliate/campaign behavior.
(Note: all of the features we provide to help you combat fraud are native to the product and included for all CAKE users.)
Use CAKE to identify affiliate fraud in real-time
These features help you capture, monitor, and analyze granular data about clicks and conversions so you can identify fraudulent traffic in real-time.
Time-to-conversion thresholds allow you to track and pay out on only the conversions that happen outside of the click-to-conversion time threshold. For example, you might not want to track conversions that happen within 30 seconds of the click because those are likely to indicate bot traffic and affiliate fraud.
Since the time it takes a consumer to complete the desired action varies for offers across various verticals and form types, you can set the time-to-conversion threshold on a per offer basis with CAKE.
There are two CAKE reporting features to help you identify questionable patterns in real-time: the Referrer Report and the Pixel Log.
CAKE’s Referrer Report allows you to see where click traffic is coming from and validate the traffic performance by each click referrer. This type of report can be leveraged to pinpoint spam traffic, uncover new or unknown traffic sources, and measure high-and low-performing referring websites. For example, it may reveal an abnormally high conversion rate from certain referrers that could indicate fraud. You can analyze the referrer report on multiple levels: by advertiser, offer, campaign, affiliate, and even sub-affiliate.
The Pixel Log shows all incoming CAKE conversion pixel requests from your advertisers across your offers and allows you to view the referrer URL and IP address of browser (HTML) conversion pixels, and the IP address of server pixels (Postback URLs). The Pixel Log can help detect affiliate fraud by showing potential patterns of IP addresses of bad actors. A Pixel Log can identify the threat of automated systems attempting to create conversions using fake information. Here’s what to look out for:
- All browser-based conversion pixels should display the Referrer URL—the thank-you page URL the pixel is placed on. If you’re seeing incoming browser pixel requests without a Referrer URL, this is likely an indication of fraud because the Referrer is either being masked by an affiliate or the affiliate is “force firing” (faking) the conversion pixel.
- All server requests (Postback URLs) should have the same IP as your advertiser’s server. (You’ll likely have one IP per advertiser but your advertiser can confirm their server IP(s) with you). If you’re seeing Postback URLs for the same advertiser or offer coming from multiple IP addresses, this is likely an indication of fraud as the requests might be coming from a browser or a server that does not belong to your advertiser.
It’s good practice to review these two reports on a monthly basis—when you’re doing your month-end closing/reconciliation, and before you pay out affiliates on commissions owed.
Conversions from whitelisted IP’s only
If you are using server-to-server tracking with Postback URLs, you can whitelist your Advertiser’s IP address(es) that will be sending the Postback URL to CAKE. This ensures that you track and pay out on only conversions from the whitelisted IP address(es). Any conversion requests coming from other IP addresses will be ignored, preventing fraudulent conversions.
To help you quickly catch fraudulent activity and stop it at the source, CAKE enables you to set notifications for excessive clicks, conversions, duplicate click IPs, or click-to-conversion ratios within a selected time period.
Use CAKE to block affiliate fraud
Once you’ve identified affiliate fraud, for example, if you’ve identified fraudulent activity coming from a certain Referrer URL or IP address(es), you can set up Rules Targeting on the Referrer level or IP Blacklisting on your Offer to block this traffic from reaching the Offer’s landing page. This will ensure you do not send or pay for unwanted traffic to your Advertiser and that your campaign performance is clean and accurate.
Use third-party integrations with CAKE to prevent affiliate fraud
To further extend your fraud management practices, you can also integrate third-party fraud prevention tools like ForensiQ and Anura. These integration partners provide real-time click and conversion scoring based on their proprietary fraud detection algorithms to CAKE, ensuring you can take immediate action to control campaign traffic that appears to be fraudulent.
With the intelligence provided by third-party integrations coupled with CAKE’s traffic control capabilities like Rules Targeting and IP Blacklisting, you can create your own rules for blocking or redirecting traffic at the campaign level.
To learn more about affiliate fraud detection and prevention in CAKE, visit our Knowledge Base here.