According to Influencer Marketing Hub and The State of Affiliate Marketing: Benchmark Report 2022, affiliate marketing spend was $8.6 billion in 2017 and is expected to increase to $13 billion by the end of 2022—and hit $15.7 billion by 2024. What’s more, in 2021 affiliate marketing-focused platforms raised more than $300 million in 2021 alone, with roughly 10,000 firms offering or specializing in affiliate marketing services.
Affiliate marketing accounts average about 9% of marketing budget in 2021 with interest growing in this particular marketing category more than 300% between 2017 and 2021. What’s more, at least 25% of brands are leveraging bloggers in their affiliate marketing campaigns.
Does this mean that affiliate marketing is legit?
Is affiliate marketing legit?
According to the industry analysts at Forrester, 81% of advertisers are using affiliate marketing to help their businesses generate leads, find customers, and make sales.
NOTE: If you're interested in learning more about what affiliate marketing is and how to get started as an affiliate marketer, you can read our article by clicking on the link.
What’s more, Keshoo research suggests that 85% of online shoppers use Google to learn about a product or service before they buy. So if you have a blog, website, or social media presence with a lot of followers or site visitors and talk about or review products; or are a business owner who has a product to sell, online influencers could be a worthwhile affiliate marketing strategy.
In other words, yes, affiliate marketing is legit. That being said, there are some affiliate marketing programs that aren’t.
How to know if an affiliate marketing program is legit?
Although affiliate marketing is legitimate and an integral part of most companies' marketing today, it can sometimes be hard to tell the good guys from the bad guys. My dad grew up in the 1940s watching B westerns where the good guys always wore white hats and the bad guys all wore black hats.
He would spend summers in Castledale, Utah with his grandmother, who as a girl, worked in a general store frequented by the local cowboys, farmers, outlaws, and sometimes even the infamous Butch Cassidy and the Sundance kid.
On one of these visits he asked her, “Did the good guys wear white hats and the bad guys wear black hats?”
She replied, “Nope. They were all dirty and smelly. You couldn’t tell the difference.”
Although I can’t speak to the dirty and smelly reference, it can be hard to tell the good affiliate marketing programs from the bad ones. Even though there are what is commonly referred to as “White Hat” marketing and “Black Hat” marketing tactics.
Although I’m not going to talk about specific programs, let’s talk about some of the red flags associated with a sketchy affiliate marketing program.
Signs of sketchy affiliate marketing
The success of affiliate marketing strategies, like anything wildly successful and lucrative, has attracted its fair share of sketchy individuals and companies looking to cash in on what they see as easy money. Here are a handful of red flags to watch out for according to the folks at Post Affiliate Pro.
Fake products or services
Many “Black Hat” operations create websites and ads for products that don’t exist. I’ve personally seen websites that have simply copied and pasted the code from a successful affiliate marketer and substituted their fake products or services.
Jeff Kirk, writing for Post Affiliate Pro, suggests, “Make sure to keep an eye out for the review page, as this is one of the main signs that you may have encountered a scam.”
As a general rule, if it sounds too good to be true, it probably is. If you scan through the online reviews and they are all positive, that should be a red flag. No matter how good a product and service may be, 100% positive reviews means either a legitimate company is trying to mislead their customers or it’s a scam. Either way, this is not someone you want to do business with.
“Another sign that you ran into a fake product is the use of low-quality or stock photos,” adds Kirk. “...legitimate brands will invest time and money to get their products to look appealing and increase their chances of catching your eye.”
Get-rich-quick schemes
Fraudsters really like people looking for a way to get rich quick. Unfortunately, there really are no shortcuts. To run a successful affiliate marketing enterprise, it’s going to require some elbow grease—just like every other business.
Unrealistic commissions on each sale and the implication that you’ll have customers falling all over themselves to buy; along with a large fee to participate are a good sign you’re talking to a fraudster.
“On average, affiliate programs’ commissions range from 5% to 30%,” says Kirk, “so if you run into a program offering 80% commissions, you should probably do some follow-up research on it.”
It’s amazing what you can learn about a business opportunity with a quick Google search.
Elaborate cookie-stuffing scheme
Cookie stuffing is when an affiliate leaves a number of cookies from different websites on a visitors device. Because those links with cookies are how an affiliate marketer gets paid, if a visitor decides at some point to actually make a purchase, the affiliate who dropped the cookie will get the commission—even though they didn’t do anything to earn it. Some of these cookies can even override those left by legitimate affiliates who won’t get the commission they earned.
Transaction fraud
If you’ve ever experienced a stolen credit card being used to buy something online, this is what we’re talking about. Stolen PayPal and credit card details are traded on the dark web and can be used to make unlawful purchases without the owner's consent through an affiliate link.
“This is particularly bad for businesses since they lose money from paying the affiliate’s commission, the product shipped, and the eventual credit card chargeback that the card owner will request once they notice the illegal purchase,” adds Kirk.
Bot traffic
Bot traffic is when a script or a program initiates traffic rather than a human user. Fraudsters will use bots to inflate the number of visitors you have to your site to make their offer sound more attractive to you. If you see a lot of traffic, but no conversions, it’s probably bot traffic and not a very good affiliate marketing opportunity.
Fake leads
Exactly what it sounds like. Many merchants will pay for leads because it gives them an opportunity to make a sale. Unfortunately, there are fraudsters that will use the personal data that has been stolen from people and sold through the dark web to fill out the lead forms. If you’re paying an affiliate marketer doing this, you're paying for leads that will never convert to a sale.
Typosquatting
URL hijacking, or typosquatting, is when someone buys a URL that is the same as a genuine one except it will include a common typo or keying error a user might make when typing in a URL and redirect that traffic to their own website, so it doesn’t generate a real lead.
Website cloning
I mentioned earlier copying the code on a website you want to emulate and substituting your product or service. This is the way people steal a legitimate affiliate marketer’s traffic to claim the commissions. “It seems similar to typosquatting,” says Kirk, “but it goes much further than that; websites are usually copyrighted, and cloning the content would be a copyright violation.”
What does all this mean?
These are things you need to watch out for if you're a brand looking for affiliate marketers to sell your products. You also need to be aware of these practices if you’re a potential affiliate so you can avoid working with those networks who espouse these practices.
Leveraging affiliate marketing or acting as an affiliate marketer are legitimate and profitable ways to successfully introduce products or services to the people who use them—you just need to be aware and recognize the red flags.
