This content has been authored by Shenaly Amin, Head of Marketing at Rightlander. Rightlander is one of The APMA’s executive partners, and they’re a leading marketing compliance and intelligence tool.
Affiliates and third-party marketing partners have long been viewed as valuable assets to a brand’s marketing strategy. Estimated to be worth over $15 billion in 2024, according to Influencer Marketing Hub’s 2022 Affiliate Marketing Benchmark Report, affiliates have effectively become a welcome extension to an advertiser’s marketing department. It’s no wonder that more than 80% of advertisers say they have adopted this channel to generate revenue, according to a 2023 Forrester Research Study.
Despite its burgeoning popularity, the affiliate marketing sector grapples with significant challenges and concerns, particularly regarding regulatory compliance and consumer protection laws. The enforcement of strict regulations governing advertising and promotions has led to significant increases in banned ads. For instance, in its 2023 Ads Safety Report, Google revealed that 5.5 billion ads were taken down for misleading advertising, a 6% increase from the previous year. It also suspended 12.7 million advertiser accounts in the same year, a 90% increase from 2022, and removed 2.1 billion ads from displaying on affiliate sites, up 40% from the previous year.
These actions underscore the importance for affiliate marketers to prioritise marketing compliance to mitigate the risk of having their ads banned, face substantial penalties, and damage to their brand reputation.
From a lack of transparency on advertising practices and sources of traffic to neglected inactive affiliates, be it expired promotions or new affiliates approved without thorough checks, many common pitfalls can be avoided in affiliate marketing. Let’s look at these pitfalls and understand how to navigate them effectively:
Lack of Brand Control
Entrusting affiliates with marketing your brand comes with obligations. Advertisers must establish clear communication channels with their affiliates and provide clear guidelines, brand values, messaging, and expectations to avoid inconsistencies in representing their brand.
Quality vs. Quantity
A vast number of affiliates promoting your brand doesn’t necessarily mean more revenue unless they come with quality. Whilst having an extensive network of affiliates is desirable, the quality of the partnerships should always come above their quantity. Affiliates who camouflage their marketing practices and traffic sources or withhold information on where they are advertising carry high risk and can damage your brand image with potential customers due to misaligned expectations. Having full transparency and engaged affiliates who target your relevant audiences with content that aligns with your brand values will drive better results.
Compliance and Regulation
Advertisers are responsible for ensuring that their affiliates and marketing partners adhere to strict regulatory advertising guidelines. When marketing infractions occur, they are broadcast quickly online and immediately impact your brand’s equity. Violations can also be costly through regulatory fines, investigations, compensation and lost revenue.
One of the biggest pitfalls for advertisers is transparency around their affiliates’ and sub-affiliate marketing practices to ensure promotions are published clearly and unambiguously. This is where regulatory bodies like the Advertising Standards Authority (ASA) have frequently upheld complaints and fined brands for failing to communicate all significant promotion conditions upfront.
Fraudulent Practices
Tied to compliance challenges, fraudulent marketing activity such as click fraud, cookie stuffing, and incentivised traffic can also result in wasted marketing budgets as some brands struggle to measure the value. Let’s look into each of them and their respective pitfalls:
1. Click fraud involves artificially inflating the number of ad clicks without genuine interest from users. Advertising platforms like Google Ads have strict policies against click fraud. If detected, businesses may face penalties such as suspension of advertising accounts or even permanent bans.
2. Cookie stuffing is a tactic in which affiliate tracking cookies are placed on people’s devices without permission. This results in businesses paying affiliate commissions without receiving genuine sales or leads.
3. Incentivised traffic: some activity aims to acquire customers by giving them different incentives for clicking on a link and engaging with content or an offer. This could be done misleadingly or falsely.
Fraudulent activities result in immediate financial losses and damage a business’s long-term sustainability and reputation.
Performance monitoring and optimisation
Finally, a common pitfall is failing to monitor and optimise your affiliate program’s performance continuously. Regular monitoring provides opportunities to improve ROI and optimise your marketing efforts. Using analytics to evaluate the effectiveness of your campaigns and keep track of performance is vital to growing your affiliate program.
Best Practices for Mitigating Affiliate Marketing Pitfalls
- Know your affiliate partners. Research and evaluate their suitability and marketing efforts across platforms before approving them for your program. Once on board, build a sustainable relationship to ensure transparent communication and alignment with your brand values and expectations.
- Monitor affiliate campaigns and track results. Provide actionable advice on optimising performance while ensuring content aligns with brand and regulatory guidelines and does not compromise quality.
- Keep abreast of regulatory changes and keep your affiliates in the loop. Give them as much notice as possible to ensure they make changes per the new rules and requirements.
In conclusion, affiliate marketing must be executed responsibly and with high trust and transparency. There should always be open communication between advertisers and their affiliates and well-defined guidelines and rules for affiliates to follow. There should also be controls to ensure full compliance with increasingly stringent advertising rules. Ultimately, if you have taken steps to reduce the risks involved, affiliate marketing has the potential to grow your company significantly.
About the Author:
Shenaly Amin is Head of Marketing at Rightlander, the leading marketing compliance and intelligence tool.