• by Ray Schultz , June 1, 2022

Affiliate marketing is often promoted as an effective  revenue channel for brands. But security firm CHEQ contends that the area is rife with fraud.  

A study released Tuesday by cyber security firm CHEQ says that 17% of all traffic coming from affiliate programs is fake, up from 10% two years ago, and that total losses for the industry should hit $3.4 billion this year. That figure is based the calculation that affiliate marketing has grown from $15 billion to $20 billion.

The study adds that bots and human-malicious traffic, including botnets, click farms and automation tools, are being driven by affiliate partners - 

"Affiliate marketing has unfortunately become synonymous with fraud and fake traffic" states Guy Tytunovich, founder and CEO of CHEQ. "We're seeing click fraud and cookie stuffing schemes, as well as transaction and chargeback fraud, all becoming extremely prevalent within affiliate programs, especially large ones.”

The announcement of these findings states that the data is part of a broader, on-going study by CHEQ, looking at fake traffic across over 50,000 websites, deploying over 2,000 cybersecurity tests on ever site visit to validate its authenticity. 

But some marketers successfully deploy affiliate marketing. For instance, 29% of those marketing to new movers say they use affiliates as part of their  of their customer acquisition and retention program, according to a recent study by Ascend2. 

However, that usage is well below that of social media marketing (66%) and email/personalized offers (62%).  

Meanwhile, partnership automation firm Partnerize reports that the average order value for affiliate sales was up 18% in  April.

Partnerize, which works with such brands as Pizza Hut, Burrow, Stubhub, British Airways and Sakura Life, puts together a monthly index -- the U.S. Retail Affiliate Marketing Sales Index. The firm measured the gross merchandise sales directly attributable to affiliate marketing promotions for the period beginning January 1 through December 31 and compared them against the affiliate gross merchandise sales for the same period in 2021. 

For his part, Tytunovich argues that it’s no longer a question of 'do I have fraud' -- it's only a question of how much.”