Is Affiliate Marketing Scam or Legit?: 5 Facts About Affiliate Marketing

April 6, 2024

Is affiliate marketing a scam or legit? Affiliate marketing is a legit business model where you refer your audience to a product they might want to buy for a commission. This business model is a great opportunity for online creators like YouTubers, bloggers, and social media personalities to monetize their content by sharing details of their favorite products with their audience. For example, a passionate traveler promoting the hotels they stay at through their blog and earning a commission ‌through the TripAdvisor affiliate program each time a reader uses their affiliate link to book a stay. This is someone that is knowledgeable about a product and niche that is offering real value to society by providing their firsthand experience.

However, there are many scammy things that occur in the affiliate marketing industry, which has led people to question its legitimacy. Some common instances where affiliate marketing becomes more like a scam are when affiliates use deceptive advertising techniques like phony before and after pictures or make the majority of their money by promoting their own affiliate marketing course. 

A real instance of scammy affiliate marketing in action is the case of LeanSpa. LeanSpa used affiliate marketers that created fake news websites to promote their health niche product with deceptive weight loss claims. Even worse, affiliates tricked customers into enrolling into a $79.99 monthly subscription. They marketed the offer as a “free” trial where they only had to pay for shipping and then automatically set them up for recurring monthly charges that were difficult to cancel once they had the credit card details, according to the US Federal Trade Commission.  

leanspa affiliate deceptive advertisment

Many affiliates use deceptive marketing techniques at scale using paid advertising. This looks something like targeting seniors with Facebook Ads that showcase before and after pictures on anti-wrinkle cream to play on their insecurity and lack of understanding of the internet, only to sell them a low-quality product from China that doesn’t really work. This type of manipulation is common in affiliate marketing because an affiliate marketer doesn’t need to have their name attached to the product so they can deceive customers without consequence. 

anti wrinkle cream deceptive advertisment

There are also many “gurus” in the affiliate marketing industry that sell people on purchasing their course by talking about how much money they are making, when they are really making a large portion of their money by promoting their course. Many of these affiliate marketing courses like Commission Hero 2.0, Super Affiliate System, and Legendary Marketer, allow students to earn money by promoting the course and teach them how to do so effectively in the course curriculum. This is similar to an MLM scheme in that you pay to get in by buying the course and then promote the course to others to make money. 

reddit post pointing out how affiliate marketing can be a scam

Local lead generation is another online business model that many find preferable to affiliate marketing. Instead of getting roped into using deceptive advertising tactics so that you can pay your bills each month, a local lead generation business helps small business owners find more opportunities. A local lead generation business does this by creating simple websites that rank for local searches on Google and then sending the leads to local business owners each month for a fee. 

In the following article, we discuss some of the most common affiliate marketing scams and how you can avoid them as an affiliate marketer. 

5 Facts About Affiliate Marketing

1. Affiliate Marketing Has Scams and Frauds

Affiliate marketing scams and frauds have been growing. According to Influencer Marketing Hub, almost 30% of brands are affected by affiliate fraud. This scenario caused the affiliate marketing industry to lose $3.4 billion to fraud and scams in 2022. To be a successful affiliate marketer, consider learning about the most common affiliate scams and fraud such as bot traffic, ad hijacking, and click spam.

2. Affiliate Marketing is Not a Pyramid Scheme

Affiliate marketing is constantly being compared to a pyramid scheme. While both business models carry out the promotion of other people’s and company’s products, a pyramid scheme makes money by recruiting new members. In fact, 84% of publishers and 81% of marketers in the United States use affiliate marketing to make money online. This study by Forrester Research implies that affiliate marketers don’t make money through memberships. So when talking about affiliate marketing vs pyramid scheme, always remember that affiliate programs are legal and free.

3. Affiliate Marketing Has Legit Programs

Legitimate affiliate programs are widely available on the internet. 84% of businesses worldwide are using affiliate programs, according to Mediakix. Because of this, you can easily join an online affiliate marketing program or an affiliate network. This gives you access to select a specific product or service and start promoting it through a website blog post or using social media platforms. Some examples of legit online affiliate marketing programs include Rakuten Advertising, CJ Affiliate, ClickBank, and eBay Partner Network.

4. Affiliate Marketing Can Make You Money

You can actually make money from affiliate marketing by advertising big and small businesses' products or services. Increased website traffic and affiliate link clicks translate to higher sales. You can earn an average of $2,500-$7,500 in affiliate marketing income monthly. And according to Influencer Marketing Hub’s 2024 Benchmark Report, the affiliate marketing industry is projected to grow to $14.3 billion in 2024 and $15.7 billion in 2024.

5. Affiliate Marketing is Worth It in 2024

An affiliate marketing business is worth it in 2024 because of the industry’s 10% growth in overall revenue since 2016. And digitalization is pushing online entrepreneurs to engage in affiliate partnerships with well-known brands. They mainly use influencer marketing and email marketing to gain a hefty affiliate commission. This trend is expected to continue in 2024 as digital marketing progresses.

Can Affiliate Marketing Be a Scam?

Affiliate marketing can be a scam. It's a legitimate business if you do it right. However, some people scam customers with fake products through low-quality landing pages. This industry has scammers and fraudsters that destroy its reputation. While this much is true, many individuals have already succeeded in affiliate marketing. Pat Flynn, Shawn Collins, and Zac Johnson are great examples of how legit the affiliate marketing business is. Hence, differentiating an affiliate marketing scam or fraud from a legitimate program is crucial.

Can You Lose Money in Affiliate Marketing?

Yes, you can lose money in affiliate marketing. This situation happens when you:

  • Use paid advertisements but get few sales or conversions
  • Pay for tools or software that are not that useful
  • Become a victim of an affiliate marketing fraud or scam

You also lose potential sales if you have poor-performing digital marketing strategies, choose a low-selling product, or can’t promote your affiliate link effectively. However, your biggest loss is your time and effort. To be a successful affiliate marketer, consider joining an affiliate marketing course like Matt Diggity’s The Affiliate Lab, Kyle Loudoun’s Wealthy Affiliate, or Super Affiliate System by John Crestani. It is pivotal to pick the best affiliate marketing courses to scale your income to 6 figures monthly. Additionally, selecting an established affiliate program and a high-quality affiliate product helps you strengthen your reputation.

What are the Most Common Affiliate Marketing Scams?

Get-rich-quick schemes, transaction and click fraud, and fake products are the most common affiliate marketing scams. However, there are other types of affiliate fraud and scams.

Fake Affiliate Marketing Products

The fake product scam usually conceals itself as a legit product from well-known brands. A fake product damages both the affiliate marketer's and the brand’s credibility.

Affiliate Cookie Stuffing

Affiliate cookie stuffing or cookie dropping is when fraudsters push tracking codes on a user’s device through various affiliate networks. Every time the user makes a sale, the fraudster gains the affiliate commission.

Get-Rich-Quick Affiliate Marketing Schemes

This is a common affiliate marketing scam that targets new affiliate marketers. They promote pretentious ads that promise proven strategies to earn money quickly. Scammers often disguise themselves as knowledgeable mentors or coaches.

Affiliate Marketing Spoof Traffic or Bot Traffic

Spoof traffic or bot traffic affiliate marketing fraud happens mostly to Pay-Per-Click (PPC) affiliate programs. Fraudsters use bots or individuals to generate fake traffic (clicks and impressions). Click farms and ad stacking are also common tactics in this type of affiliate marketing fraud.

Pay-to-Join Affiliate Marketing Programs

This affiliate scam uses pay-to-join affiliate programs to make money from aspiring affiliate marketers. Remember, all affiliate marketing programs are free.

Fake Affiliate Marketing Leads

Fake leads are generated when fraudsters use other people’s information or create another identity that doesn’t exist. They forward these fake leads to businesses or advertisers in exchange for monetary incentives.

Affiliate Website URL Hijacking

Affiliate website URL hijacking or typosquatting happens when fraudsters clone an affiliate program’s website and redirect genuine traffic to advertise fake affiliate links.

Affiliate Marketing Click Spam or Click Fraud

This affiliate scam is rampant nowadays. Scammers use fake affiliate links to steal customer information or breach the user’s device and accounts.

Google Ad Hijacking

This affiliate marketing fraud happens when fraudsters outbid a business for branded keywords and redirect legit traffic to a cloned website. It is a combination of website URL hijacking and click fraud. Fraudsters can claim the affiliate marketing income intended for the legitimate company.

Affiliate Marketing Transaction Fraud

Transaction or sales fraud is when fraudsters steal other people’s credit card or online wallet details. They use the stolen information to purchase from affiliate programs. Businesses lose potential revenue because they will release the affiliate commission, send the product, and pay chargebacks for the fraudulent transaction.

What are the Most Common Signs of an Affiliate Marketing Scam?

The presence of links with shady websites and exaggerated affiliate marketing income and benefit claims are the most common signs of an affiliate marketing scam. According to AuthorityHacker, other signs include:

  • High affiliate website traffic that doesn’t convert
  • Lesser affiliate website traffic than normal
  • Increased affiliate product chargebacks or refund claims
  • Lack of affiliate product transparency
  • Mismatched lead/customer information

As a general rule, if something is too good to be true, it might be a scam. Thus, it is crucial to be on the lookout for sudden spikes or drops in your affiliate marketing performance metrics.

How To Avoid Affiliate Marketing Scams as an Affiliate Marketer?

  • Research more about the affiliate marketing program.
  • Review your affiliate partners’ terms and conditions.
  • Verify the credibility of your affiliate products.
  • Read testimonials from trustworthy sources.
  • Use legitimate websites, tools, and platforms.
  • Check your website/s for shady links and ads.
  • Inspect your traffic’s IP addresses occasionally.
  • Utilize validation and online tracking technologies.
  • Track your online traffic and conversions.
  • Check your lead quality regularly.

Consider implementing strict performance monitoring systems and affiliate marketing tools and software to avoid affiliate marketing scams as an affiliate marketer. Besides using these concrete steps to ensure a legitimate affiliate marketing business, here are additional measures you can do:

Affiliate Marketing Related Articles

  • Affiliate Marketing vs CPA Marketing - A well-researched article on making money online through affiliate marketing and CPA marketing. It compares the profitability of each online business model in terms of product promotion. Plus, it features the 4 reasons you should do CPA marketing.
  • 6 Figure Affiliate Bootcamp - An in-depth review of Liam James Kay’s 10-module self-paced training course. It discusses key digital marketing strategies, ad implementation, and how to build a high-converting sales funnel. The article also features the 2 risks of affiliate marketing.
  • Is Affiliate Marketing Worth It in 2023? - Yes. Affiliate marketing spending in the U.S. is expected to surpass $5.7 billion in 2024. And according to Google Trends, online searches for “affiliate marketing” hit the 85% mark from 2016 to 2024.
  • Is Affiliate Marketing Legal in Australia? - Yes, affiliate marketing is legal in Australia. Affiliate marketers must comply with the Australian Consumer Law, Spam Act, Privacy Act, and Do Not Call Register Act. This article also highlights the legal obligations, requirements, and risks of an affiliate marketing business.
  • 10 Reasons Affiliate Marketing Does Not Work - Affiliate market saturation, fast-paced industry movements, and affiliate program restrictions are some reasons why affiliate marketing does not work. This article focuses on the 10 reasons that make this business model challenging. Plus, it gives you tips on how to make affiliate marketing work for you.

Why Local Lead Generation Outshines Affiliate Marketing

Local lead generation still outshines affiliate marketing. It’s a strategic way to make money online in 2024. And because you don’t have to do much convincing to acquire leads, it is a much more stable passive income. Alternatively, affiliate marketing requires you to put in considerable time and effort to market your affiliate products. You need to be knowledgeable in digital marketing to create high-quality blog posts and engaging content.

Is affiliate marketing legit in 2024? Yes, affiliate marketing is legit in 2024. According to Demand Sage, the estimated worth of the affiliate marketing industry will be $27.78 billion in 2027. That’s a whopping 91% growth from 2020. This means that affiliate spending and revenue will continue to soar from 2024 to 2027.

While affiliate marketing is lucrative, succeeding in this industry entails dealing with the misconceptions of potential customers and the affiliate market. On the other hand, the local lead generation business model is simpler and offers an unlimited income stream. Plus, you don’t have to deal with fake products, and you own your digital assets (websites). By ranking your websites organically on Google, you will get calls from free leads. And forwarding them to local businesses will help you make up to $50,000 in passive income monthly.

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Ippei Kanehara

$52K per month providing lead generation services to small businesses is for digital hustlers, industry leaders and online business owners.

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