The performance channel is a complex network of many different online strands bound by a common commercial metric – cost per acquisition. A wide range of promotional types typically make up an affiliate marketing programme operating under the CPA model and this presents a number of challenges to an affiliate network. This requires careful monitoring of publisher signups and potential investigation into publisher activity which is why the role of the compliance function within a network is becoming increasingly important.
A network’s compliance function involves more than just removing publishers engaging in unethical or non-compliant activity. It also enables new technologies to work within the channel by ensuring that current publishers are treated fairly – for example, ensuring that existing affiliate cookies are not overwritten by publishers that engage in retargeting. It is also important for the compliance function to ensure wider regulatory initiatives are dealt with effectively.
One of the main roles of the compliance team is the prevention of unethical activity. It is essential to prevent advertisers paying out commission that is not due to an affiliate as sales have resulted from unscrupulous activity. It is also important to monitor publishers are working within the terms and conditions set out by each advertiser. For example, if brand bidding is not allowed on a programme, this needs to be tracked. Those publishers who are engaging in this activity will not only be breaking the advertiser’s terms and conditions, they will also be pushing up the advertiser’s PPC costs while lowering the ad rankings due to unauthorised brand bidders.
Publisher Signups to the Network
The first stage of compliance occurs with the initial signup to the network. If the compliance function is able to detect potential fraudulent activity from the off, it reduces the chances of publishers attempting to defraud advertisers with unethical activity. We have invested significantly in this area and have a number of checks and flags in place to identify any potential issues at the earliest stage.
This is no simple task. With 30-50 publishers on average signing up to the network each day, there is a significant amount of checking that goes into approving a publisher onto the network. By cross referencing a number of parameters each publisher attempting to sign up to the network is checked extensively to ensure they are suitable to promote advertisers on the network.
Individual Programme Signups
While applications to the network are closely vetted by the compliance team, there is still a chance that some unethical publishers can pass through this rigorous process. The second stage is for the account handler/advertiser to look into publisher signups for individual programmes. This allows for a second phase of defense and for publishers to be closely scrutinised to ensure they fit in with the advertiser’s terms and conditions and any brand guidelines that may be in place.
Ongoing Publisher Monitoring
Finally the continued monitoring of publisher activity provides further protection against any publishers attempting to defraud advertisers. This third stage of compliance is the area that remains contentious, open to interpretation, difficult to evaluate and monitor as well as demanding of additional resource.
This process essentially involves ongoing checks of existing publisher activity on the network to ensure it is compliant with both individual programme terms and conditions as well as the networks general network publisher agreement, as well as general upholding of wider industry standards.
The types of activity typically being monitored include:
Duplicating: Clones of legitimate sites
Spamming: Sending mass emails/lack of opt-in permission
Domain Squatting: Creating misspelt sites
Diverting: Deceptive links, cookie stuffing
Faking: Inflating a programme’s clicks
Stealing: Using stolen credit cards
Brand Bidding: Bidding on merchant terms
Rule Breaking: Contravening network T&Cs and the IAB AMC’s codes of conduct
Indicators of Unethical Activity
For general unethical or suspicious activity across affiliate programmes there are a number of indicators that can be helpful when trying to detect this. Metrics that should typically be monitored include high conversion rates, poor quality sites driving high sales volumes, traffic redirects being in place and large volumes of sales occurring at abnormal hours. Account managers and advertisers are encouraged to monitor this before deciding that additional investigation is required.
With the results from the latest version of the Online Performance Marketing study from the IAB in conjunction with PWC indicating the affiliate channel generates an estimated £14bn revenue for advertisers, compliance is becoming an increasingly important function within the channel. Affiliate Window remains at the forefront of compliance across the affiliate channel.
This week saw us launch our first ever white paper on compliance. This looks at the subject in great depth detailing the processes we have in place from reviewing publisher applications to removing fraudulent publishers from the network. You can find a copy of this white paper here.
Please also visit our compliance blog for more information on the role of our compliance function and regular updates from the team.