Tackling Fraud and Compliance in Performance Marketing - Heiko Hildebrandt


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Tackling Fraud and Compliance in Performance Marketing - Heiko Hildebrandt

  1. 1.
  2. 2. Tackling Fraud & Compliance <br />In Performance Marketing<br />
  3. 3. l Agenda<br />Facts and Figures about Fraud<br />Affiliate Fraud<br />Merchant Fraud<br />Tackling Affiliate Fraud<br />Tackling Merchant Fraud<br />Transparency and Compliance: <br />“The role of an affiliate network”<br />
  4. 4. l Facts and Figures about Fraud<br />Imagine 10%* of the industry’s turnover is generated through fraud<br />* Source: Edelman, Ben (2008): interview on affiliate marketing fraud published by Econsultancy (http://econsultancy.com/uk/blog/2908-ben-edelman-on-affiliate-marketing-fraud)<br />
  5. 5. l Affiliate Fraud: Forms and definitions (1/2)<br /><ul><li>Click fraud
  6. 6. Clicks made manually and/or automatically by and/or on behalf of the affiliate without any interest in the merchant’s product(s) and/or services
  7. 7. Fake orders
  8. 8. Sales orders conducted by and/or on behalf of the affiliate without any interest to keep the merchant’s product(s) and/or use the service(s) offered by the merchant
  9. 9. Cookie dropping/spreading
  10. 10. Placement of multiple cookies in the user’s browser through a single click without the user’s awareness of or interest in the merchant’s promotional material or website</li></li></ul><li>l Affiliate Fraud: Forms and definitions (2/2)<br /><ul><li>Brand bidding
  11. 11. Unauthorized use of the merchant’s brand name and thereby violation of the merchant’s SEM restrictions
  12. 12. Misplacement of promotional material
  13. 13. Placement of the merchant’s promotional material on unauthorized websites and thereby violation of the merchant’s publication restrictions</li></li></ul><li>l Tackling Affiliate Fraud: General<br /><ul><li>TT validates every affiliate (site) registration manually (language, content, “Impressum”, etc.) and avoids automated approvals.
  14. 14. TT changes the affiliate’s initial self-categorization if necessary.
  15. 15. Upon registration, TT investigates the affiliates by using the TT User Check which gives off a signal in case an earlier flagged fraudulent IP is used by a new user.
  16. 16. TT maintains a blacklist of fraudulent affiliates.
  17. 17. Merchant approves or rejects each affiliate site registration for his program(s) manually (if he is in doubt, he contacts TT and/or the affiliate immediately).
  18. 18. Merchants and affiliates communicate via the TT Ticket System.</li></li></ul><li>l Tackling Affiliate Fraud: Click fraud<br /><ul><li>Click to Lead Rate (CLR) and Click to Sales Rate (CSR) are significantly below average.
  19. 19. Massive amounts of clicks are generated within a (relatively) short time frame (via foreign IP addresses).
  20. 20. After a click has been made/registered the user’s IP address is blocked for a predefined time period (e.g. 3 hours).
  21. 21. TT uses self-learning click filters that block/drop clicks if common automated systems or scripts simulate clicks.</li></li></ul><li>l Tackling Affiliate Fraud: Fake orders<br /><ul><li>Return quota of affiliate in question are significantly above average.
  22. 22. Orders are often made by the affiliate himself or his relatives (conduct last name checks in case of doubt).
  23. 23. Merchants should create a blacklist of fraudulent credit card transactions and fake delivery addresses.
  24. 24. Assessment period of transactions has to exceed max. return period granted to the merchant’s customer.
  25. 25. Keep in mind to use de-duplication to avoid double payment for the same order!</li></li></ul><li>l Tackling Affiliate Fraud: Cookie dropping/spreading<br /><ul><li>Conversion rates (CLR and CSR) are significantly below average.
  26. 26. Affiliates provide insufficient information about their source(s) of traffic.
  27. 27. A-brand campaigns and campaigns with long(er) cookie runtimes are over proportionally affected.
  28. 28. Affiliates promote the same campaign via multiple networks and sites to cover their tracks and to make the fraud less obvious.
  29. 29. Affiliates usually fail to successfully promote any small online shop. </li></li></ul><li>l Tackling Affiliate Fraud: Brand bidding<br /><ul><li>TT can enable the TT Brand Monitor as a premium service for merchants which monitors the use of the merchant’s brand name by scanning the most popular search engines multiple times per day.
  30. 30. The monitor will pick out all tracking links, including other main networks.
  31. 31. Merchant receives detailed reports.</li></li></ul><li>l Tackling Affiliate Fraud:<br />l Misplacement of promotional material<br /><ul><li>TT software gives insight into location of originating click and thereby prevents misplacement of promotional material.</li></li></ul><li>l Merchant Fraud: Forms and definitions (1/2)<br /><ul><li>Arbitrary cancellations
  32. 32. Merchant cancels valid clicks and/or transactions.
  33. 33. Flat cancellation quota
  34. 34. Merchant applies a flat cancellation quota policy regarding all generated clicks and/or transactions.
  35. 35. Strategic campaign pausing
  36. 36. Merchant pauses his campaign(s) abruptly without any pre-information given to the network and his affiliates.</li></li></ul><li>l Merchant Fraud: Forms and definitions (2/2)<br /><ul><li>Intended tracking problems (after re-launch)
  37. 37. Merchant intentionally causes tracking problems and/or delays the fixing of such.
  38. 38. Delayed or non-payment of invoices
  39. 39. Merchant intentionally delays invoice payments and/or does not pay them at all.</li></li></ul><li>l Tackling Merchant Fraud:<br />l Arbitrary cancellations and flat cancellation quota<br /><ul><li>Cancellation reasons are predefined in writing and reduced to the essential minimum by merchant and TT.
  40. 40. Reason behind each cancellation has to be given to TT and the affected affiliate(s).
  41. 41. Proof has to be provided by the merchant upon request.
  42. 42. Maximum cancellation quota per campaign has to be defined in writing by merchant and TT.</li></li></ul><li>l Tackling Merchant Fraud: Strategic campaign pausing<br /><ul><li>Minimum time period before campaign pausing has to be predefined in writing by merchant and TT in order to give affiliates enough time to remove the merchant’s promotional material.
  43. 43. Reasons for campaign pausing have to be predefined in writing by merchant and TT and communicated up front to the affiliates.</li></li></ul><li>l Tackling Merchant Fraud: <br />l Intended tracking problems (after re-launch)<br /><ul><li>Contract penalties are asserted by TT in case of intended or tolerated tracking problems:</li></ul> “Client undertakes that any tracking code placed on the site(s) of Client will be operational at all times and for all payment methods. In the event that TradeTracker ascertains that this is not the case, an amount of € 0.15 shall be charged to Client by TradeTracker for each visitor provided to Client from the date that the tracking code has not been (correctly) in place until the time that the tracking code is once again implemented correctly on Client´s site(s).” <br /><ul><li>Tracking has to be implemented correctly and tested successfully before campaign start and re-launch.</li></li></ul><li>l Tackling Merchant Fraud:<br />l Delayed or non-payment of invoices<br /><ul><li>Merchants are asked to make prepayment for each campaign.
  44. 44. After three monthly invoices have not been paid, TT pauses or stops the merchant‘s campaign(s).
  45. 45. TT hands overdue invoices over to debt collection after the last reminders. </li></li></ul><li>l Transparency and compliance: <br />l“The role of an affiliate network”<br /><ul><li>TT is first and foremost a technology provider.
  46. 46. By not acting as a merchant, affiliate or media agency TT does not face any conflict of interest.
  47. 47. TT is fully independent.
  48. 48. TT acts according to a strict code of conduct to secure its high traffic quality.
  49. 49. TT acts as an intermediary between merchants and affiliates.
  50. 50. TT excludes affiliates and merchants that have committed fraud and informs the police in such cases.</li></li></ul><li>If something is too good to be true, it usually isn't! <br />
  51. 51. Thank you. Vielen Dank.<br />Heiko Hildebrandt<br />