Levon Nikoghosyan, PartnerMatrix CEO, tackles the hot subject of affiliate marketing frauds, focusing on using up-to-date technology to effectively reduce scams.
The recent years saw iGaming companies focusing more than ever on their security. As an affiliate software provider, we witnessed first-hand an enormous increase in inquiries about system security and antifraud tools. And, while affiliate frauds have always represented a certain concern, the current boom of the industry also fueled a rise in more sophisticated and harmful methods.
The stakes are high: the value of the online gambling market was estimated at around $60 billion in 2020, compared to $53 billion in the previous year. And it is expected that the number will soon double, reaching $127 billion by 2027. Not only didn’t the pandemic manage to slow this growth, but it actually encouraged it.
With so much money involved, it’s no wonder that affiliate frauds are on the rise. Especially since a big share of the incomes are generated via affiliate channels, with some casinos paying $50,000 to single affiliates monthly.
This makes us, as an affiliate software provider, more aware than ever of our responsibility to help our clients filter out fraudulent activities and make sure their affiliate operations run smoothly. The first step of our efforts to fight scams is having and sharing a good understanding of their mechanisms.
Most affiliate fraud activities aim to obtain commissions from operators by using scams or breaking the rules of the affiliate programs. One way to do this is to exploit the weak points of the system, as it happened too often with the PPC affiliate commission model. Affiliates discovered how they could trick the system with browser extensions, fake or hidden links, or pop-under texts and images. As a result, the PPC model has been replaced by less risky models, such as the Cost per Acquisition or the Revenue share.
However, not even these are without their risks: affiliate scammers can use deep bots to create fake traffic and even bogus actions such as placing a deposit or performing a game action. They’re so efficient that a single scammer can generate losses of tens of thousands of euros.
To grasp the size of the problem, it’s enough to take into account the hundreds of portals and forums for blacklisted casinos and affiliate scams. And let’s also take a look at some cases that require operators to be on alert in order to avoid fraud.
Let’s assume that you are managing your casino affiliate program and running Cost per Action or/and Revenue Share programs. You pay $1 for every user who makes up to 10$ deposits for the CPA program and you pay 10% for the Revenue Share program.
Affiliates get their commission after the players perform certain actions, such as placing the first deposit or generating a certain amount of revenue in a specified time interval. While this approach significantly lowers fraud risks, scammers don’t lose any time and they always search for new ways to obtain underserved commissions.
It’s a good idea to get to know a few types of activities that can suggest a possible affiliate marketing scam:
There are a lot of behaviours that need to be carefully monitored and checked. The good news though is that technology is catching up to fraudsters. Almost any risk can be automatically measured and prevented with the right tools and techniques, such as anti-fraud detection or real-time data reports. Let’s check out these two options in more detail.
The variety of affiliate marketing fraud schemes and mechanisms has naturally triggered some countermeasures. For instance, for PartnerMatrix, our affiliate marketing platform, we developed the Anti-Fraud Intelligence tool, meant to automatically stop any type of affiliate fraud on the spot. It acts so smoothly that your affiliate manager won’t even know about it until he receives the system’s notification.
The Anti-Fraud Intelligence tool has several layers of fraud detection and prevention, and every module works independently, filtering certain types of fraud activity and reporting with a detailed breakdown under the Fraud Reports. The system finds the risks, starting from simple IP checks (players vs affiliate, location, IPS match) to deep analytics that can prevent “sure bets”.
What’s more, its flexible software architecture allows adding new modules to filter new risks. The system is constantly updated depending on the market’s needs and the operator’s requirements. The goal is very clear: to detect the scammer even before they try to hack your program.
The live data exchange between affiliates and operators is another powerful tool in the hands of affiliate managers. Having access to the data in real-time means that operators and affiliates alike can act on the spot. They can either cut off traffic if they detect it’s coming from a bad source, or make sure they extend a well-performing deal.
That is the idea we had in mind when building our API-based, real-time data reports into our affiliate platform. And the results didn’t take long to appear: one of our casinos used the reports to spot some suspicious betting activity. A player placed a bet that was way larger than their earlier bets – and the reports showed that they were in fact trying to place a “safe bet”.
The topic of affiliate marketing frauds is not only a huge one to cover – but it’s also constantly evolving. After all, it’s a natural consequence of working in one of the most valuable industries in the world. Where there is big money, there are also huge risks (it’s estimated that affiliate frauds might have mounted to $ 1.4 billion in 2020).
Mitigating those risks becomes part of the job for any affiliate marketing software that’s worth its salt and making sure you’re using such software is essential in building up active protection for your business. API-based, real-time data reports and automatic fraud detection come to the rescue of Affiliate Managers, making it possible to exclude risks for both sides of the business and ensure a secure infrastructure for the affiliate as well.
This essentially means putting in place a transparent partnership, which is invaluable regardless of the company’s size and market. Transparency is a great way to build market reputation and make sure it becomes known that your proposal is a fair partnership. That in itself will turn away scammers and attract affiliates that will help your brand in the long term.
As lottery numbers are announced on television anywhere in the world many people would think the sector has barely...
Recently PartnerMatrix was acknowledged as Affiliate Supplier of the Year by the prestigious EGR B2B Award. On this occasion,...
Stian Enger Pettersen, CEO of CasinoEngine at EveryMatrix, explains how a new wave of jackpot innovation can help turbocharge...
The key for us as a true B2B iGaming software provider is to help gaming operators implement bold ideas and unleash unlimited creativity.