Ad networks must unite to fight fraud! Volunteers?

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fraud_small.jpgADOTAS – “We are seen as the ugly stepchild of online marketing,” Jivan Manhas of MediaTrust told the crowd at the Performance Marketing Leadership Summit hosted by OfferVault. “We call it performance marketing because the term affiliate marketing is tainted.”

No one in the packed room at the DoubleTree in midtown Manhattan disagreed. It’s no secret that during the past 18-20 months, widespread fraud has greatly harmed ad networks and advertisers — and given them an ugly reputation. Big-budget advertisers are staying on the sidelines.

The solution seems to be for everyone in the segment band together to fight fraud. So who first?

Uniting is a tough proposition for ad networks as they fight tooth and nail for their best publishers and aren’t keen on sharing them. The network space has been fragmented for a long time and communication channels are lacking if they even exist. In general, networks have been too reactive Manhas lamented.

“Our industry has dropped the ball on this issue,” he said. “We got all excited about the numbers, but no one has built the technology to really take advantage…. We should have had antifraud tools built into platforms years ago.”

And the scammers have become so arrogant as to openly advertise for CPA network accounts on sites like Twitter.

“These guys are living like kings,” he said. “They probably have hundreds of accounts and are just milking them.”

MediaTrust has found a way to wipe most of the fraud out of its network, but it hasn’t been a pretty process. Manhas noted that 95% of fraud derived from unverified publishers; so MediaTrust simply separated the good eggs from the bad eggs — they demanded each of their publishers provide them with referrals. Those who couldn’t comply were shown the door.

The company was given a hard time on many advertising forums, but ultimately the purge was successful. The few good publishers improperly kicked out came back and stated their cases, and ultimately rejoined the network.

However, the industry needs standardization to really take a bit out of this crime. Law enforcement officials aren’t considered a viable option as the fraud is difficult to explain and many scammers are internationally located.

A blacklist? What criteria would force an affiliate on it? There was little agreement. A whitelist? How would you manage such a thing and maintain network privacy? A third party? But who would run it?

Manhas saw potential in HitPath’s recently released tracking solution, which shared blacklisted publishers with other websites. But he advocated for a third-party agency similar to the Interactive Advertising Bureau (which he noted was not set up to monitor performance marketing), but more specific to the cause. He cited the Performance Marketing Alliance, but called it only a starting point that needed industry support.

“We must lead the charge to build an industry association,” Manhas said. “Industry leaders have to come together to fight fraud.”

This sentiment seemed to be shared throughout the room, but the path to making that happen was up for debate. Until a universal solution is found, ad networks have little choice but to be extra vigilant in vetting the affiliates on their networks. As MediaTrust found, a purge could do a network a lot of good.

4 COMMENTS

  1. Affiliate fraud has been around for 10+ years, it’s nothing new. It’s just come the surface in a noticeable way with the advent of continuity offers, which do high levels of volume. Here are some procedures that can be put into place to prevent and avoid it:
    – Screen all new affiliates/publishers via phone. Not approving until criteria are passed.
    – Advertisers can call each order or lead to verify authenticity. That would ferret out fraudulent sales and leads quickly and the publisher can be terminated right away.
    – Working closely with Advertisers to monitor any chargebacks, cancellations, voids, return…and looking at the referring source of the sale. Coordinating with their call centers to put procedures in place to notice fraud and alert someone.

    These are a few suggestions from my experience. I hope organizations like the PMA step up and put together a plan to combat affiliate fraud. But it’s really up to the ad network and Advertiser to monitor and prevent fraud from ever occurring. Thanks!

  2. We had some great discussions after the event. Thanks to Mark Roth of OfferVault for the great event. Between the PMA stepping up and defining standards and the private sector solutions being proposed by Mark and EJ of Epic, I think we have enough momentum and desire to move this issue quickly and expediently. He key will be getting the leaders in the industry involved and participating…

  3. The performance leadership summit was a good start to taking the necessary steps to pre verify affiliates to reduce the amount and scale of fraud in the performance space. Marc of Offer Vault has some good ideas on a “first line of defense” by deploying industry best practices around and certification for legitimate affiliates. Networks will then apply their own verification methods to further validate.

    At PerformLine we have built and Intra Campaign Transparency technology platform that will allow networks to have real time verification in how leads and sales are being generated. This will help Networks and Advertisers catch the fraudsters who manage to squeak through initial screening processes. As we discussed at the summit, where they incentive is high enough, there will always be fraudsters who find a way into networks in spite if their best efforts to keep them out.

  4. My impression of the nasty reputation of the term, “affiliate marketing” had nothing to do with publishers defrauding networks.

    I thought it was about “Get Rich Quick” purveyors of eBooks. Like, buy this 10-page PDF, and tomorrow you will be sleeping till noon and working in your pajamas. Without an understanding of how much work and stress it takes to be in that position.

    Anyway… Blacklists Of Naughty Publishers? They exist informally.

    I had some of my info, including a URL, used by a scammer who was signing up for network accounts, pretending to be me. But with their traffic and their PO Box for payments. t affiliate/CPA, but also CPM. That was a hassle to respond to the networks (I actually got email confirmations for the signups, and tried to have the scammer banned. With that postal address blacklisted. And measures against this use other people’s info

    I strongly agree with requiring email from the submitted site. If I want to run your ads on abc.com, then I should be able to give a challenge/response

    OTOH, confirmations are a hassle. Some networks want to send items your physical address (which might have security/theft problems) I seem to recall Google sending a postcard with a PIN. Some other networks want a phone conversation (hassle when twelve hours time zone distance.)

    But, anyway, “the ugly stepchild”? That also comes from being associated recently with weight-loss, bogus-celeb-endorsed, monthly-billed, type of deception. Resulting in those evil, “Affiliate Marketers” getting slapped by the FTC.

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