Affiliate Fraud: Affiliate Marketing Networks Lose Money to Fraudsters

Where there’s money to be made, the unscrupulous will flock. That certainly seems to be the case when it comes to click through advertisements which continue to grow more lucrative by the day. Illegal activity that occurs by means of click through advertisements is widely known as click fraud. Click fraud occurs when someone exploits banner ads or paid text links by clicking on them in order to drive up the amount of payable clicks. This in turn hurts the advertisers’ budgets since they are the ones paying for the real estate of the site on which they are advertising.

Studies have shown that the use of click fraud is driven by two main factors. The first is due to individuals who use click fraud on their own personal sites in an attempt to maximize their payout.  The other group of perpetrators is that of companies who use click fraud as a means of draining their competitions’ advertising budgets. Fraudulent clicking is most frequently executed via automated software or an online bot that is programmed to click on the click through ads. There are also many cases in which people will manually click on the banners or pay per click ads.

In order to combat click fraud, it pays to have software that can minimize or completely nullify the activity of advertising networks paying these suspected fraudsters. Tipalti’s Risk Management Module (RMM) helps networks avoid repeat fraud by alerting them when a previously detected fraudster attempts to sign up for payments under an alternative identity.  It essentially acts as a watch dog and, while a fraudulent clicker may put on a new disguise, the watch dog never forgets the violator’s scent, which means that he’ll never get past undetected. If a network chooses to opt in, Tipalti’s RMM can also alert them if a swindler, previously detected by a different advertising network or affiliate network, tries to sign up.