I’m 3 minutes away from a Saturday but it wouldnt be right without a typical fraud Friday post. This is starting to turn into a bit of work. So far I’ve been invited to two podcasts and 2 speaking sessions covering fraud in the affiliate industry. Who said running your mouth wasnt a good thing?
Affiliate Managers - reading the blog, pay real close attention because I’m only going to explain this once. As a manager it’s pretty damn easy to get that lead report from an advertiser who is claiming fraudulent credit cards and just terminate the affiliate so this educational post may or may not be of any use to you. However, should you read it and comprehend what I am going to say, you may be able to stop these types of publishers BEFORE too much damage is done and costing you a relationship with an advertiser.
Advertisers - Some of you are experienced, some of you are not and some of you are aspiring to run your own offer. Pay attention because when you start messing with your filters on processing their are most likely going to be options for you to use to keep a lot of this out yourself.
Publishers - You might as well pay attention to. Publishers are likely to participate in a lot of internet marketing forums and I can tell you that methods of using “gift cards” have been talked about openly. If you feel like you are being a “rat”, I’ll give you a different perspective to think about. If you know someone is doing this and you dont report it, you are only costing other publishers a possible opportunity to promote the offer, a network’s relationship with an advertiser and quite possibly the advertiser not even utilizing the Pay Per Performance Industry in which…-> We ALL Lose.
Alright so think about this for a moment. Ever seen those $50 Visa Gift Cards at say Walmart? Say you have a publisher cloaking traffic as is the norm in this industry. Unfortunately for the network, it looks like standard encryption or cloaking and the publisher hiding their precious traffic source. Now say you have rebill offers at $3.95 or less. At an average of $3.95 or less and a $50 gift card, a publisher can run 12 leads a day.
Doesnt sound like much right? Let me show you the compounding mindset of a gift card frauder who really has their shit together. Most of you probably wont believe this but the example I am going to show you is a VERY conservative one. After you see the example, imagine a ring of about 50 publishers who are teaching this to outsourced help and compounding the problem.
Monday:
- 1 Publisher
- 5 - $50 gift Cards = 12 leads per gift card @ avg. $3.95 per trial offer.
- 60 leads total today spread across 10 networks = 6 leads per network
- AVG. pay (conservative) $30 payout on each trial offer
- 60x$30 = $1800.00 - $250 for the gift cards - $100 miscellaneous hosting/traffic = $1,450
- At the very least, this publisher is going to make a $1,000 dollar day.
Not a bad day’s work for a frauder right? Volume is low enough that the frauder probably hits each network on 1-3 offers meaning 1-2 possibly 3 leads at the very most per offer. You really think the advertiser is going to pick up that small amount of leads? 99.999% No. Most networks arent even going to pick that up and see that but that is what you as a manager have to train yourself to look for.
Now let me compound this over a month long period and show you REALLY what an organize frauder is capable of. Managers, you are probably going to drop a brick because they most likely make more in a month than you do in a year. Pretty scary huh.
- Publisher has 30 networks
- Publisher hits each network for 12 leads a month across 3-5 offers keeping conversions down.
- Total = 360 leads @ avg of $30.00 per lead = $10,800.00
- Each card holds 12 leads so = 30 cards x $50 = $1,500.00
- Hosting, Garbage Traffic = $1,000 a month (With what I know this is very conservative).
- so $10,800 - $1500 - $1,000 = $8,300 a month.
$8,300.00 a month people. It’s happening out there. Now the scary part is your organized frauder isnt going to have just one account. Oh no, they know there is going to be casualties of war so they are likely to have 3-5 accounts sitting on a network. So if your organized frauder is spreading across multiple offers, staying under the radar on just 3 accounts at the end of the month they could possibly be looking at = $24,900.00
Scary right? It can, it does and it is happening people. It’s so small you probably dont even see it and the advertiser damn sure are going to see it especially since organized frauders do their research and stick to offers that are likely getting volume. Another thing they will do is trace and offer and possibly hit across a few networks.
This is one organized publisher. Multiply that by 100 organized frauders and you can see what we are dealing with in this industry. If you have low volume publishers hitting you like this, I urge you to take a REALLY close look at them. Their names, their information, even call them. Before first payment, have them send you a copy of their license or passport.
But most importantly…
Learn to identify this early on so that you can communicate with the advertiser and have them take those leads away. Shady networks out there. (I dont want to get off on a rant). It pisses me off to see us have an offer that I know is on shit networks that allow these tactics. Most of the advertisers just dont know any better and as networks sometimes the offer is given out to another network that allows this crap. I’ve seen it time and time again. I’ve literally sat an explained it to advertisers time and time again. Whether you care or not, for those who take their businesses seriously in the pay per performance space, it’s in your best interest to start watching stats ALOT closer on low volume for rebill offers.
If you see a new publisher sending these warning flags, start investigating before it costs you a relationship.
