Myth or Reality: Is Affiliate Marketing a Scam?

What isn’t a scam when it comes to online business? Most companies today wonder about this, as any profitable or legitimate business conducted entirely online is bound to raise suspicions of fraud. Affiliate marketing is no exception.

Affiliate marketing is a strategy online businesses employ to promote their brand and generate sales using affiliate partners. But what does it truly entail?

We created this article for everyone unfamiliar with the mechanics of affiliate marketing, as well as for those who suspect that affiliate marketing is a scam.

What Is Affiliate Marketing?

New affiliates should understand the concept behind this marketing strategy thoroughly and form their own accurate opinion on whether affiliate marketing is a scam. So, what is affiliate marketing?

In affiliate marketing, a (for-profit) enterprise with an affiliate program pays promoters (affiliates) to help generate sales. It is a marketing model that does not require any major investment on behalf of the seller yet can help generate more revenue and traffic for them.

Affiliate marketing is essentially a subset of digital marketing where third-party individuals who run websites, blogs, or other content promotion platforms help direct prospective customers to a seller’s website. For the affiliate, the model is seen somewhat as a passive income, where they earn a specific percentage of any sale the business records with its help.

The Three Pillars of Affiliate Marketing

Three basic components comprise the affiliate marketing model that all new affiliates should know how to leverage. Those are:

The affiliate — What is an affiliate marketer? It is an individual or a group that uses different marketing strategies to drive traffic to a specific business. The affiliate earns a percentage of each sale the company makes with their direct help. Affiliates create and publish content that directly or indirectly links to a company's product or service. Their job is to create quality content and use proper promotional strategies to direct visitors’ attention to the product/service of the seller.
The seller – Also knowns as the marketer/advertiser/business, is a company that sells products or services. This is the one that creates an affiliate program and decides how much and for what specific customer actions it pays the affiliate. Sellers mostly pay affiliates based on sales but can also offer commissions for lead generation, clicks, registration, downloads/installs, etc.
The consumer – This is the individual who visits the affiliate’s platform. The affiliate attracts the customer by publishing a topic of interest to the consumer and then prompts them to follow an affiliate link to the seller’s website. The goal is to initiate them to make a purchase or payment for a product/service they like.

How Affiliate Marketing Works

Affiliate marketing is quite a simple process:

An affiliate publishes a piece of content on their website, blog, video channel, etc.
The affiliate inserts/mentions/cites a link to a seller within the content.
A visitor accesses the content and opens the link.
The customer visits the seller’s website.
The seller records the visit.
The seller pays the affiliate per sale, per click (PPC), or lead.

Is Affiliate Marketing a Scam?

In the plainest forms, no, affiliate marketing is not a scam. But, like any other legitimate business, it is subject to exploitation and fraud.

Those asking themselves whether or not affiliate marketing is a scam can rest assured that this is not a ruse created to deceive. Affiliate marketing entails hard work and dedication to succeed. Yet, there are those looking for a shortcut to the pot of gold at the end of the rainbow, using various deceitful and illicit ploys to get there.

So, while affiliate marketing is not a scam, there are dubious affiliates and businesses alike who exploit this scheme.

What Is an Affiliate Marketing Scam?

Unfortunately, every auspicious business, especially those conducted online, can be usurped and transformed into a fraudulent scheme. The same goes for affiliate marketing.

An affiliate scam, in the broad sense, is any intentional activity that is illegal or goes against the rules of the seller’s affiliate in an effort to earn money.

Common Types of Affiliate Marketing Scams

From fake credit card purchases to using bots to generate artificial clicks, scammers can get quite creative when aiming to deceive. Here are several affiliate marketing scams you can find today:

Cookie stuffing – Cookie stuffing is a wrongful purchase attribution technique in affiliate marketing where an affiliate earns a commission by inserting cookies from several affiliate networks via add-ons, pop-ups, or ads, into a visitor’s browser. If the consumer buys something or pays for a service, the ‘affiliate’ will earn a sales fee, despite not using legit affiliate promotional techniques or skilful means to induce the visitor to pay.
Artificial clicks – This is a type of digital marketing scam where an affiliate earns a commission per click by using malware or other malicious software to generate non-existent clicks.
Spoof traffic – Spoof or bot traffic is generating fake traffic, impressions, or clicks to deceive an affiliate partner into believing the affiliate had generated leads, clicks or impressions and get them to pay the affiliate commission for what is essentially fake traffic.
Product scam – This is a blatant affiliate marketing fraud where scammers earn via fake products, websites, and services. Product scammers direct visitors (through ads or other means) to a website, brand, or product by a well-known company in that sector. The consumer may pay, but they either won’t receive any service/product in return or one that is not actually by the company that markets that product.
Transaction fraud – In this type of identity fraud, the scammer uses stolen credit card information to buy or pay for something and collect a commission.
Fake lead generation – A lead is an affiliate website visitor who is considered a prospective buyer of a product the affiliate promotes on behalf of a business. Because some companies pay affiliates for generating leads, lead generation fraud is when the fraudster uses stolen personal information or fake information to steer the seller into believing the affiliate has attracted leads.

How to Recognize Affiliate Marketing Scams

While some scammers are harder to detect, there are those who give off clear signals that it’s likely a fraud. Below is a list of suggestions on how you can detect affiliate marketing scams and certain red flags you should watch out for:

Websites packed with ads
Aggressive touting of products or services
Promises of high earnings
Read affiliate/seller reviews
Negative reviews are actually a good sign
Affiliate programs are free—steer clear of programs that require payment to register/sign up

Conclusion: Is Affiliate Marketing Legit or a Scam?

Affiliate marketing is not a dubious pyramid scheme or well-crafted plan to defraud businesses and consumers. It is a highly favourable and convenient form of digital marketing that consistently attracts new affiliates. Unfortunately, it also attracts fraudsters.

New affiliates and companies alike must be extremely vigilant and be able to detect the telltale signs of an affiliate scam. While some scams are obvious, others are much more cunning.

So, the answer to the question ‘Is affiliate marketing a scam?’ is a resolute no. Then again, such scams do exist, instil a sense of mistrust and can compromise the credibility of an entirely legitimate digital marketing model.