Global affiliate marketing spend will exceed $37 billion in 2025, with brands reporting returns of $12-15 for every dollar invested. These numbers make affiliate partnerships irresistible on paper. The reality is messier: nearly 20% of all affiliate traffic is fraudulent, and ad fraud costs across digital advertising exceeded $84 billion in 2023 alone.
The connection between these statistics is not coincidental. The same incentive structures that make affiliate marketing attractive to legitimate partners make it equally attractive to fraudsters. High commissions designed to motivate genuine promotion also motivate click stuffing, cookie fraud, and traffic laundering. The more lucrative the programme, the more sophisticated the exploitation.
This creates a peculiar optimisation problem. You cannot simply lower commissions to discourage fraud – that also discourages legitimate partners. You cannot raise commissions to attract premium affiliates without simultaneously attracting premium fraudsters. The solution lies not in commission levels but in commission structures, vetting processes, and monitoring systems that distinguish between partners who generate genuine value and those who simulate it.
Affiliate Marketing Fraud Taxonomy – Know Your Enemies
Understanding what you are protecting against clarifies which protections matter.
Cookie stuffing involves placing affiliate tracking cookies on users’ browsers without their knowledge, typically through invisible frames or scripts on websites users visit for unrelated purposes. When those users later make purchases – purchases they would have made anyway – the fraudulent affiliate claims credit and receives commission for traffic they never influenced.
Click injection occurs primarily in mobile environments. Fraudulent apps detect when a user is about to complete an app download or purchase, then inject a fake click milliseconds before conversion. The last-click attribution model – still common in affiliate programmes – credits this final click, rewarding the fraudster rather than the marketing channel that actually influenced the decision.
Brand bidding fraud involves affiliates bidding on your trademarked terms in paid search, intercepting traffic already seeking your brand and collecting commissions for conversions you would have achieved organically. You pay twice: once for the affiliate commission, once in the form of lost organic traffic and inflated brand keyword costs.
Traffic laundering routes low-quality or fraudulent traffic through legitimate-appearing intermediaries, obscuring its origin. By the time traffic reaches your tracking systems, it appears to come from reputable sources. The sophistication of modern laundering operations means that surface-level traffic analysis rarely detects the problem.
Why Commission Structures Is Important
Consider two affiliate programmes offering identical 30% commissions. Programme A pays on first click, with a 30-day cookie window. Programme B pays on last click, with multi-touch attribution that distributes commission across the customer journey, and a 7-day cookie window.
Both programmes have the same headline commission rate. But Programme A is structurally more attractive to fraudsters. The long cookie window rewards anyone who can drop a cookie on a user’s browser, regardless of whether that cookie precedes actual marketing influence. The first-click attribution means early, illegitimate touches receive full credit even when subsequent legitimate marketing drives the actual conversion.
Programme B’s shorter window reduces the value of speculative cookie placement. Multi-touch attribution means fraudsters cannot claim full credit by manipulating a single touchpoint – they would need to control multiple stages of the customer journey, dramatically increasing complexity. The structure itself creates friction that legitimate affiliates barely notice but fraudsters find prohibitive.
This principle extends beyond attribution models. Programmes that pay immediately attract cash-flow optimisers who generate activity without concerning themselves with long-term value. Programmes that pay on customer retention or second purchase attract partners aligned with sustainable customer acquisition. The incentive structure shapes the partner population.
Vetting Paradox
Thorough partner vetting reduces fraud but also reduces programme scale. Every verification requirement eliminates both bad actors and legitimate affiliates unwilling to navigate bureaucracy. The challenge is finding verification measures that disproportionately burden fraudsters.
Identity verification provides a baseline. Fraudsters prefer anonymity; requiring verifiable identity – matching website domains to registrant information, confirming business registrations, validating contact details – introduces accountability that legitimate partners accept and fraudsters avoid.
Traffic source transparency reveals intention. Partners willing to explain their traffic generation methods are typically partners with methods worth explaining. Those who deflect questions about traffic sources or provide vague descriptions of “content marketing” or “social media presence” often have something to hide.
Historical performance on other programmes offers predictive value. Partners with established track records across multiple affiliate networks have reputations to protect. Newcomers with no history – while potentially legitimate – represent unknown risk. Risk-based approval processes can tier partners accordingly, offering provisional access with reduced commission rates until performance proves trustworthiness.
The uncomfortable truth: comprehensive vetting requires dedicated resources. Programmes that automate approval to minimise operational costs necessarily accept higher fraud rates. The choice is between investment in prevention and acceptance of losses to fraud.
Monitoring as Continuous Vetting
Initial approval is insufficient. Fraud often begins after trust is established, when monitoring attention relaxes and fraud detection thresholds become familiar. Ongoing monitoring catches partners whose behaviour degrades over time.
Conversion pattern analysis reveals anomalies. Legitimate traffic converts at predictable rates with predictable timing. Fraud often produces aberrant patterns – conversion rates that are too high (indicating traffic manipulation) or too low relative to volume (indicating junk traffic), time-to-conversion that clusters suspiciously near cookie expiration or attribution windows.
Geographic and device consistency matters. Partners who claim to specialise in UK traffic but generate conversions from geographic IP patterns inconsistent with that claim warrant investigation. Sudden shifts in device composition – mobile to desktop, or vice versa – can indicate traffic source changes that merit scrutiny.
Refund and chargeback correlation provides ultimate validation. Fraudulent conversions often result in higher-than-normal refund rates or chargebacks when fictitious customers discover unexpected charges. Partners whose conversions produce downstream problems are partners whose traffic warrants termination regardless of its apparent quality at point of acquisition.
Quality-Volume Trade-off
Every affiliate programme must decide what it optimises for. Programmes optimised for volume accept lower-quality traffic in exchange for scale. Programmes optimised for quality sacrifice scale for traffic that converts to valuable long-term customers.
Neither approach is inherently superior, but clarity about which optimisation you have chosen determines which metrics matter. Volume-optimised programmes should track cost per conversion and remain profitable at that cost even with elevated fraud rates. Quality-optimised programmes should track customer lifetime value by acquisition source and accept higher per-conversion costs for traffic that produces valuable customers.
Problems arise when programmes attempt both optimisations simultaneously – seeking volume while expecting quality – without acknowledging the trade-off. This typically manifests as setting commission rates high enough to attract volume while implementing fraud controls insufficient to maintain quality. The result is the worst of both worlds: high costs and high fraud.
The honest conversation with stakeholders acknowledges this trade-off explicitly. Either you invest in the vetting, monitoring, and management infrastructure required for quality, or you accept that a percentage of affiliate spend will be lost to fraud and price that loss into your calculations.
Structural Recommendations
For programmes prioritising quality over volume, several structural choices reduce fraud exposure while maintaining attractiveness to legitimate partners:
Multi-touch attribution with decay weighting distributes commission across customer touchpoints while weighting later touches more heavily. This maintains incentive for partners who genuinely influence purchase decisions while reducing reward for partners who merely intercept final clicks.
Delayed commission payment ties payment timing to verification windows. Paying commissions 30-60 days after conversion allows time for refund requests, chargebacks, and traffic quality analysis before funds leave your control. Legitimate partners with established cash flow can accommodate this delay; fraudsters seeking immediate extraction cannot.
Customer quality bonuses supplement base commissions with bonuses tied to downstream metrics – second purchase rates, customer retention, absence of refunds. Partners confident in their traffic quality embrace these bonuses; partners dependent on low-quality volume resist them.
Reverse clawback provisions recover commissions when post-payment analysis reveals fraud. The mere existence of clawback provisions deters some fraud; the credible enforcement of them deters more. Partners unwilling to accept clawback provisions self-identify as unwilling to stand behind their traffic quality.
Affiliate marketing done well generates reliable customer acquisition at predictable costs. Done poorly, it generates impressive activity reports that disguise fraud and cannibalised organic traffic. If your current affiliate programme creates the latter, a strategic consultation can audit your incentive structures and identify specific improvements. Explore our Affiliate Marketing services to see how we approach partner programmes that attract the right partners.
