Online affiliate marketing fraud translating to offline fraud
You’re a bank or a brokering organization. It’s that time of the year when you want more and more people to have their bank accounts with you. Or you want more and more people to sign up for a DEMAT account with you. What do you do? Simple! Set up a digital marketing campaign to reach out to your audiences, wherever they are. Look for affiliates who would help to support your ‘sales’.
These affiliate marketing strategies help brands increase their sales, visibility, in exchange for a commission when the said objective is increased. It could either be a sales event, or a form sign up event or in our case an account opening event. The brands maintain an infrastructure for such affiliate marketing program that tracks which affiliate delivered which web users to monitor their credit via an affiliate identifier. When the user clicks on the link provided by the affiliate, there’s a HTTP cookie set in their browser identifying the source though which the user landed on the site. Thus, when the objective of the campaign is fulfilled, which is asking users to sign up for an account with the said bank, the affiliates are rewarded.
Simple enough? Absolutely! You spend some amount on these campaigns; on an average one lead acquisition costs around INR 1000. You pay a small commission to these affiliates who would bring customers to you and it’s a win-win situation. You have successfully garnered ‘X’ number of signups with a digital marketing campaign for account opening.
But, do not celebrate just yet. You’re yet to be privy to one the biggest scams where all your money spent on these programs might just be a complete waste.
mFilterIt got to a task of analyzing the ROAS for a financial institution who ran a campaign for account opening using affiliate marketing strategy. We found out that after spending lakhs of rupees on the campaign, the amount of leads that were acquired were in sync with the amount spend on the advertising. But, it still yielded on result in terms of revenue. How is that possible? Here’s how we figured another affiliate fraud tactic which not only plagues the online world but has now graduated offline.
Let’s go back to an era of door-to-door sales. These salesmen convinced the offline user to buy the product, and upon the final purchase, the sales team received their commission. Similarly, what these fraudulent affiliates are doing is that they’re incentivizing their user. They go to random users in the market, ask them to open an account with the bank, and in return they’ll receive ‘x’ amount of money in CASH. Say, an affiliate earns INR 1000 per one account opening, he then incentivizes the user with 200 or 300 in exchange for him to open an account with the said institution. In this case, the end result is justified but post the account opening, there’s no activity which takes place from these accounts. More often than not, the kind of users of who open an account (given the fact that they’re getting INR 300 just to give their information) they have a yearly income of less than 3lakh rupees. Which means that quality of users who’re opening an account with you are not really your target audience. Which also translates into the fact that the amount you’re spending on affiliate marketing program is a complete waste of budget? But how are these fraudsters compensated? The fraudsters share their affiliate link via WhatsApp or mail, therefore when the user clicks on the link from their own device, it is understood that the traffic is diverted through the said affiliate and thus they receive their commission. So when the analytics are deep dived, one can see that the user is real, IP address is real, device is real yet fraud exists. Why? Because these new accounts are as good as dormant accounts and you’re paying people to acquire more such accounts.
Fraud detection is way more complex that merely detecting an act of fraud. One needs to analyze a campaign’s success and failures to further understand what helps in maximizing their ROAS. And that’s where we come to your rescue. We’re sure the above case must have piqued your curiosity to finally analyze your campaign’s performance to not only detect fraud but also to analyze ‘such’ ‘non-fraudulent’ activity. Guess who’s a pro at it? Talk to us now!