Affiliate Marketing Fraud Now a $3.4 Billion Problem, New Study Finds

CHEQ, the global leader in Go-to-Market Security released new data today on the extent of fraud in the affiliate marketing industry. Back in 2020, the cybersecurity firm showed that close to 10% of traffic coming from affiliate programs was fake, costing the industry $1.4 in losses. Two years later, and that number has now almost doubled, as it has risen to 17%, and considering that the affiliate marketing industry has since grown from $15 Billion to over $20 Billion, the industry is expected to lose over $3.4 Billion to fraud in 2022.

The data is part of a broader, on-going study by CHEQ, looking at fake traffic across over 50,000 websites, deploying over 2,000 cybersecurity tests on ever site visit to validate its authenticity. The research uncovered a wide array of bots and human-malicious traffic being driven by affiliate partners – including botnets, click farms and automation tools.

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“Affiliate marketing has unfortunately become synonymous with fraud and fake traffic” said Guy Tytunovich, Founder and CEO of CHEQ. “We’re seeing click fraud and cookie stuffing schemes, as well as transaction and chargeback fraud, all becoming extremely prevalent within affiliate programs, especially large ones” he continued. “It’s no longer a question of ‘do I have fraud’, it’s only a question of how much”.

The data was released on the heels of discussions around bots and fake users in social media, namely surrounding the halting of Elon Musk’s Twitter takeover bid, due to a dispute over the rate of bot activity on the platform. Earlier this year, PayPal also took a hit, after it had admitted to uncovering 4.5 million fake accounts in its systems.

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