Affiliate Networks v In-house Programs – Fraud Focus
When making the decision whether to join an affiliate network or go it alone with an in-house program, there are many aspects of the business that must be taken into account.
You need to consider the time and effort you want to put into the venture, your own level of expertise, the amount of tracking and reporting you require, and the kind of measures you can put in place to discourage fraud.
Fraud and non-compliancy are some of the biggest issues facing affiliate programs, and there are many tricks and shortcuts that unscrupulous affiliates can use to try to beat the system.
One such issue is cookie-stuffing, where an affiliate can send a tracking code to their site visitors, usually linked to a coupon site or widget, to drop cookies onto a machine when the code recipient is using it. Once someone then visits the desired website, the cookie makes it appear as though the affiliate has directed the traffic to the designated site, and should therefore receive a commission.
In 2008, eBay sued two of its biggest affiliates, Shawn Hogan and Brian Dunning, for cookie-stuffing. eBay had paid out a combined $35 million to the pair, before engaging in an FBI investigation ‘Trip Wire’ of affiliates whose numbers seemed ‘too good to be true’. Both were later indicted and were sentenced in 2014.
Warren Jacobs, MD of ActiveWins, commented: “Some affiliates will always try to get around the system. Fraudulent techniques like cookie-stuffing are unfortunately prevalent in online gaming, as in other industries, and if left unchecked can be financially devastating.
“This is why we employ such stringent tracking practices, making sure we know exactly where our traffic is coming from.
“Compliancy is key, but we’re constantly keeping an eye out for suspicious activity. If an affiliate’s conversion rate looks too good, we’ll flag it and take a closer look.”
As part of an established affiliate network, compliancy checks are part and parcel of the service. Running an in-house program means you are missing that layer of protection. It also makes it far more difficult to build up the level of trust and credibility that an established site such as Betfred has.
Warren, said: “It can take years to build up that kind of relationship, which is afforded to you automatically as a member of an affiliate network such as ActiveWins. It can be very difficult to reach your intended audience, particularly if your website isn’t already on their radar.”
As part of an online affiliate network, you have resources at your disposal to help you promote your site and drive traffic. There’s also the addition of PPC, and advanced tracking and reporting. A good affiliate network will provide comprehensive reports, using tools that an affiliate out on their own may not have access to.”
On the other hand, those using in-house affiliate programs can focus on a slightly more targeted approach, and they are in control of all aspects of their costs and revenue. They can direct their resources wherever they choose, and are the only ones in possession of any statistics they generate.
Affiliates are also far more likely to engage in fraudulent activity if there are significant financial gains to be had, as with the eBay case. Therefore, running an in-house program may carry less risk of fraud.
However, an established program is more equipped to spot, and deal with, potentially fraudulent anomalies in its data. Standard practice includes every affiliate request being individually authorised, and daily checks are performed to ensure that no one slips through the cracks.
Warren added: “There will always be loopholes that certain affiliates try to exploit, but, by performing regular checks and remaining vigilant, we can ensure that we only work with affiliates who are compliant and share ActiveWins’ ethics and values.”
It is this kind of attention to detail, combined with the resources and expertise that an affiliate program has access to, which makes being part of an established gambling network such an attractive option. Ultimately, it’s down to individual choice and what fits best with the requirements of your business.
Find out more about the ActiveWins affiliates program here.