Performance Marketing Insider recently released the results of its survey designed to shed light on the world of marketing as it relates to fraud and CPA Affiliate Networks. They reached out to affiliates, advertisers, and networks to learn their perception of fraud, if they trust their networks and if the fraud solutions work.
According to this survey, the CPA industry is awash in fraud … or fear of fraud.
As a founding member of the exciting new LeadsCouncil for ethical practices in Digital Marketing, this hit close to home. We were deeply disappointed.
The survey showed the following scary statistics:
- 84 percent of Networks utilize a fraud detection program
- 82 percent of all marketers believe fraud in performance marketing is a major problem
- 72 percent of all advertisers report being victims of fraud
- 66 percent of advertisers report little trust in CPA Affiliate Network
- 52 percent of publishers report little trust in CPA Affiliate Networks
- 49 percent of those advertisers who utilize fraud detection programs don’t believe they work
- 11 percent of networks say they have asked their publishers or affiliates to commit fraud
- 10 percent of publishers report a CPA Network has asked them engage in fraudulent practices
What does this mean?
Let’s be blunt: fraud is an incredibly destructive force in the industry. This report shows that this is something the industry needs to pay serious attention to.
As PMI reports, as more money flows into this industry, more people are starting their own networks with little (to no) experience, perhaps questionable ethics and not much trust.
What’s worse, when PMI reached out to experts following the compilation of results, very few wanted to speak on record. In fact, most refused, stating they were concerned about retaliation within the industry for discussing fraud.
Experts who did speak on the record mentioned dealing with complex schemes and tricks to trick CPA Networks, as well as the blending of traffic through different methods of promotion — most of which aren’t even allowed — and combining them with legitimate sources, all with the hope that advertisers wouldn’t notice the fraudulent practice.
This survey also shows that fear within the community is rampant, and hurting those who actually are ethical. It’s been the cause of growing concern among advertisers to implement affiliate networks, and has hurt the industry. Because of fraud, advertisers risk payouts and fulfillment costs, networks and aggregators risk payouts and chargebacks, as well as the loss of their advertising clients.
However, PMI also reports that around 90 percent of the networks are ethical, with only 10 percent marring the industry.
What can be done?
PMI spoke with David Sendroff, the CEO of Forensiq, who suggested that all advertisers and networks put in place a fraud detection tool. Tools help create transparency so both parties have a real-time glimpse of what is taking place behind-the-scenes in regards to conversions. One thing is for certain: something needs to be done.