The eCommerce landscape is a steep and slippery slope. Amazon has already captured nearly 50% of the total online retail in the US. Hundreds of eCommerce stores open every day hungry for a share in this $2.3 million industry. Only a handful survive, profitably.
Amidst this ever-increasing competition, the average e-commerce retailer is faced with the only choice – maximizing return on every penny invested. And, if you are a small scale eCommerce business owner you’d know this well that this is easier said than done. The cost of acquiring new customers is unimaginably high, to say the least. Also, did you know that the conversion rate for almost all eCommerce niches stands below 2.5%?
In search of ways to live up to their revenue potential, eCommerce businesses have identified and leveraged some untapped marketing channels. One of these happens to be affiliate marketing. Thankfully as it turns out, this new channel has worked like a charm.
Why affiliate marketing got so popular, so soon
As Bo Bennet describes it, “Affiliate marketing has made businesses millions and ordinary people millionaires”
This relatively newfound channel promises the benefit of scale and distribution at a considerably reduced cost. Plus, it’s low risk. As a small scale eCommerce business, you won’t have to pay anything out of your pocket unless affiliates actually increase your website traffic.
If you were to go by numbers it would be reassuring to know that affiliate marketing programmes fetch 16% of all online orders. In comparison, paid search drives 20% of online orders. But do count in how much you paid out on clicks which never converted! Affiliate marketing sounds like a complete win-win! Or, so you thought..
..Unless you searched up ‘affiliate fraud’ and landed on this article.
What’s affiliate fraud and how it hurts your eCommerce business
Affiliate fraudsters could be stealing from right under your nose in ways you could never have imagined. It’s advisable that you tread with caution before signing any tempting affiliate partner program that comes your way.
To begin with, it would help to familiarize yourself with different types of affiliate frauds. Let’s get rolling.
Injecting promotional ads on your website
If you’ve signed up for an affiliate program with a coupon affiliate you should know that they are permitted to promote your coupons on different social media channels. Fraud happens when an affiliate partner flouts the rules and misuses your website to inject promotional ads. The fraudster is looking to divert traffic from your website to his own without your knowledge.
Now, because this re-directed traffic ended-up clicking on a coupon that you are offering, the affiliate will be charging you the promised ‘fee’. Actually, the affiliate is cheating you by charging you for sending back your own traffic!
Hosting outdated coupons
The shopper journey is full of twists and turns. Visitors come to your eCommerce store, search products, add to cart or to wishlist, and might leave without completing a purchase.
If these shoppers are price-sensitive they might actually at this point be looking up deals and discounts on the search engine. They might land up on your affiliate partner site from this search where they find a coupon they can use to avail discounts on the products they liked. Having copy-pasted the code they resume their checkout process only to find out that the coupon is invalid!
If your affiliates are hosting outdated coupons on your website and charging you every time a shopper comes back to your site with expired coupon codes, you’ve been hit by fraud. Fraud affiliates will be charging you for sending traffic that’s eventually going to bounce off without completing any sale on your website.
A very common type of fraud, cookie stuffing can cost you millions. Affiliates have been using this unethical marketing practice to amass commissions on orders that they did not gather. This is how fraudsters make money out of cookie stuffing:
1. A customer visits your affiliate partner’s website but does not get re-directed to your site
2. Your affiliate partner places a cookie on your customer’s device
3. In an entirely new session, the customer visits your site and makes a purchase
4. The affiliate software detects cookie on user device
5. The affiliate partner scores a commission without the customer actually having clicked the affiliate link on his website.
All it took was five steps (and nearly just five minutes) for fraudsters to steal a good share out of your sales!
The list of affiliate fraud types is extensive. Additionally, with time such frauds are turning more sophisticated. Technology being a double-edged sword has opened up fraudsters to newer and significantly improved ways of crime. How do you escape falling in the trap?
Steering away from the murky waters of affiliate fraud
Should you stop working with affiliates? Absolutely not. The benefits of affiliate marketing are unmatched. Yes, the threat of getting robbed of by affiliates is also real. But, there are ways you can come out unscathed.
Choose your affiliate partner wisely
People love discounts and offers. And, you can’t stop them from hunting for the best deals online. What you can do, though, is select those affiliate patners who choose to play by fair rules of engagement.
Optimize for on-site conversions
In case you want to be doubly sure that you don’t lose out everything to affiliates, deploy smarter traffic conversion techniques. For example, you could display coupons and offers upfront on your website store itself. This way, you don’t have to make visitors complete an additional step of having to fetch a coupon code from an affiliate site, and then coming back to complete a purchase.
Track your visitors’ on-site activities, and identify segments that usually leave your website, only to come back and complete purchase using a coupon. Then, engage these shoppers with targeted offers that you are running on your website.
Be it an experience shopper or a price-sensitive one, when you optimize for on-site conversions you’ll not only be saving yourself from getting robbed by affiliates but also end up reducing the extra work that your visitors otherwise have to put in to complete a purchase.
Use tools that can spot and curtain affiliate fraud
In the U.S. alone, 25 billion worth of sales is lost because of injected adware. This may happen because the malware has adversely impacted your online store’s load time, or that spammy pop-ups are coming in the way of visitors trying to complete checkout, or because of any other distraction that the injected adware is throwing in their way. Thankfully, some smart tools can detect browser injected malware for you and instantly weed them out from your website. We’d suggest that you use them.
A good percentage of staying healthy and profitable in eCommerce can be attributed to steering clear of affiliate fraud. Even though by no means is it easy to stop it there are preventive measures to help you always be on your guard. Alongside, the tips we’ve shared in this post will help you steer clear of fraudsters as you embark on your affiliate marketing journey.