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    Protecting and Policing your Affiliate Marketing Program
    Written by: Owen Hewitson, Client Strategist – Affiliate Window & buy.at

    The issue of compliance, and how it can best be addressed, should be considered one of the most pressing topics in affiliate marketing. It undoubtedly holds the industry back from gaining greater share of online marketing budgets from key decision makers. Unnerved by high-profile instances of abuse, many senior marketing managers with little understanding of affiliates still view the channel as something of a Wild West where such activity is either tolerated or improperly policed. Despite the risk of overstating a (relatively small) problem by writing about it, some approaches to addressing it are better than others, and it is those that this article will address.

    Three Senses to ‘Compliance’
    There is firstly a distinction to be made between outright fraud, which has legal implications and is extremely serious; unethical activity, which may breach industry acceptable practice and requires common cross-industry processes to prevent it; and poor quality transactions, such as leads that do not convert (though for reasons that may have as much to do with the customer as with the affiliate referring them).

    The first of these is perhaps the most difficult to police as the perpetrators deliberately attempt to cover their tracks and hide their methods. Practically, an advertiser may see no difference between fraud and unethical activity, but policing and preventing the former requires a very different approach to the latter.

    Guarding Against Fraud is the Network’s Responsibility
    Outright fraud is a problem that should be protected against at the level of the network rather than at the level of individual affiliate programs. It should be the network’s responsibility to have in place robust and comprehensive measures to guard against its occurrence on their platforms, rather than the program manager’s responsibility to monitor their program for it. It is much better – and easier – to secure the borders from the outset than it is to deal with outright fraud on an advertiser-by-advertiser basis.

    Advertisers should demand more of their networks in this respect. A condition for their custom should be guarantees around the screening and approval process on the network. The advertiser can then focus on the particularities of their terms and conditions that will be unique to them. buy.at has invested a six-figure sum over the last 12 months in building the industry’s most advanced compliance process, drawing on a range of highly sophisticated tools to detect fraudulent activity through a range of methods including site verification, site authentication, geographic, and credit card checks. Each method is backed up human eyeballing from a dedicated Compliance team in-house at buy.at.

    Program-level protection measures, on the other hand, should be limited to what is relevant to a particular advertiser’s program. This might include Terms and Conditions of membership (though these are only effective when the advertiser is willing to properly enforce them); checks on the suitability of affiliates applying to join (though these can only be effective in screening for relevance to a program rather than detecting fraud); and extensions of the validation period (though this is a post-hoc method that does not prevent fraudulent activity and assumes that any such activity will have become clear by the time the validation period has been reached). As such, program-level checks can only really be effective in dealing with the third of the above-mentioned threats to a program – poor quality transactions.

    The Need for Industry Regulations
    Unethical activity is an umbrella term but can be distinguished from fraud in its seriousness due to the legal consequences. It is best dealt with through industry regulations that are binding across the industry. At present, there is no single body in the US affiliate marketing industry that has this role. The Performance Marketing Association, notwithstanding its great work as an advocacy body, does not share the same role of enforcing mutually-agreed industry regulation binding on its members as the IAB’s Affiliate Marketing Council does in the UK. Industry regulation is the best way to combat unethical activity, if for no other reason than that it is the industry which must determine what constitutes unethical activity. Whether or not a zero-tolerance policy should be applied to all toolbars, and how click-to-reveal coupon codes and brand bidding should be regulated, are just some of the issues which are far from clear cut and which require debate at an industry level before a joint approach to their regulation can be agreed.

    Methods of detection and prevention of genuine and serious fraud within the affiliate channel should be seen as a threat to the performance marketing model generally. Both advertisers that want to invest in the channel with confidence, and affiliates that want to ensure their sales are not being hijacked by unscrupulous actors, should ensure they work with networks that can demonstrate the highest levels of protection against such activity.
    Last edited by brandonmbeard; May 24th, 2012 at 05:28 PM.

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