The Rising Threat of Affiliate Fraud and How to Protect Your Business: Part 1 of 3
This is the 1st in a series of 3 guest blogs from IPQS, the fraud prevention experts who help LinkTrust clients combat affiliate fraud and safeguard marketing budgets
Working with affiliate networks and agencies can turbocharge business growth and drive major revenue returns. Every click, view, download, or purchase is an opportunity to attract lucrative new clients. Yet, digital lead generation and affiliate marketing programs are targeted by bad actors, who generate bogus leads and clicks for their own financial gain. Affiliate fraud drains money from marketers’ budgets and disrupts the KPIs that are critical for business growth.
According to the Global Affiliate Marketing Fraud Report, the losses in affiliate fraud are expected to increase to $172 billion by 2028 from $88 billion in 2023.
With the correct protections in place, however, organizations can defend their campaigns in real-time and confidently engage new partners. Fortunately, LinkTrust clients benefit from cutting-edge fraud prevention from IPQS, seamlessly embedded into the platform.
Top Trends in Affiliate Fraud
IPQS has recently released data-driven insights into the scale of the problem faced by the industry, with guidance on how to win the ongoing fight against affiliate and ad fraud.
34% Increase in Bot Traffic in 2024 Alone
Analysis of traffic across the IPQS global network demonstrates how prolific bot traffic is across affiliate and advertising programs. Bot traffic has increased by more than one-third since the beginning of 2024 and plays a key role in perpetuating affiliate fraud at scale.
This non-human traffic produces high quantities of fake clicks and leads, that disrupt KPIs on lead generation, click-throughs, views, and downloads. This means bad ROI for marketers and can lead to a total breakdown in trust with key partners.
It is not just the volume of attacks that are on the rise. Bots are becoming far more sophisticated and increasingly able to mimic human behavioral signals. As a result, they can bypass standard bot prevention systems, which is why businesses need more advanced bot detection.
Artificial traffic connects via proxies and VPNs in order to hide the true source of the traffic and avoid being added to blocklists. Sophisticated proxy detection and IP intelligence, which keeps up with the daily shifts in risk signals, is a crucial tool in identifying these attacks.
Up to 90% of traffic is fraudulent for some affiliate networks and advertisers
Research carried by IPQS shows that affiliate networks and agencies are struggling with dramatic spikes in fraud rates, with up to 90% of traffic being classified as malicious. This could be low-quality providers looking for bogus commissions – but is often legitimate businesses experiencing high attack levels.
Affiliate fraud threatens the authentic affiliate marketing industry, by eroding customer trust and causing an operational headache for businesses needing to urgently clean up their traffic. Affiliate networks and agencies must work with trusted providers to prevent affiliate fraud before it causes havoc to their business.
42% Increase in Stolen Identity Data Used in Lead Generation Forms
Analysis from IPQS shows that digital impersonation – when leads are generated using stolen identity data – is up more than 42% this year. Fraudsters purchase data from the most recent data breaches and use it in lead generation forms to make it look legitimate.
This is fueled by increased cyberattacks, where people’s credentials are stolen and sold on the dark web and illicit websites. IPQS has a dedicated team that monitors the dark web for leaked credentials to maintain a vast data breach search engine that helps spot bogus leads.
Schedule a demo to learn more about how IPQS solutions can safeguard your business.