Guest Post: Is the risk of affiliate marketing fraud worth the reward?

Yes says Ivan Baidin, CEO of Travelpayouts – but only if you take the right precautions

If your travel brand only pays for online leads from third party sources – bloggers, popular websites, deals promoters – that lead to an actual sale, how can there be any risk? 

Sadly fake orders and several other types of fraud mean that experts estimate that anywhere near 2% of affiliate spend falls victim to fraud. Given that roughly $12bn is spent on overall affiliate marketing each year, that’s anywhere near $240m. Travel is one of the leading categories in affiliate marketing, so that’s worrying. 

How do these frauds work and what are the most common types? Firstly there is ‘substitution, hiding, or use of prohibited traffic sources’. This is basically when you are given traffic from sources you agreed you wouldn’t pay for. ‘Brand bidding’ too is a big problem. That’s when you are being pitted against your competitors, pushing up the costs unnecessarily. 

‘Cookie stuffing’ is another trick. This occurs often whereby unscrupulous practitioners are charging you for people who didn’t actually hit your site. And finally, ‘motivated’ or ‘bot traffic’ is when your traffic (and sometimes even a booking) are totally fake.

So how do you make sure that your travel brand doesn’t get ripped off? Firstly, set correctly your terms and conditions of your affiliate program so that there are no loopholes for violation. Harder said than done, but one example might be paying commissions only after the traveler has consumed the service – thus stopping fake bookings that are later canceled. 

Secondly, it is extremely important to monitor for anomalies. Sudden surges in bookings from one partner that aren’t replicated with others should be a cause for concern, for example. Thirdly and finally, if you are one of the companies that prohibit brands bidding in contextual advertising, then save your time and money by monitoring contextual advertising campaigns using specialist software to alert for violations. 

However, one of the easiest and most effective ways to protect yourself is to work with a proper travel affiliate marketing program. Their framework and experience combined with the right tools should protect you well. For example a good provider would also have monitoring and artificial intelligence tools in place to detect suspicious activity. Additionally they should also give you a process for settling any potential claims about violations.

Ultimately where there are rewards, there is risk. But as shown, with sensible precautions you can minimize that risk down to an acceptable level – one far outweighed by the fact that affiliate marketing is, in our humble experience, the most cost-effective marketing channel for online travel brands.