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

August 18, 2023

Is affiliate marketing scam or legit? While 17% of the affiliate marketing program traffic in 2022 was from scams and frauds, this business model is 100% legit. Affiliate marketing has reputable programs from big companies like CJ Affiliate, Amazon Associates, and Shopify. However, the $1.4 billion loss from 2020 still threatens new affiliate marketers and potential customers.

Affiliate marketing is an online business model that uses performance marketing to promote small and big businesses' products and services. You earn an affiliate commission from every sale you forward to your affiliate partners. This is a straightforward transaction. But what happens in between this process is where misconceptions about affiliate marketing arise.

The affiliate marketing business is profitable. You can earn $1,000-$10,000 yearly. However, an affiliate scam or fraud causes people to lose trust in this online business model. While some beginner and expert affiliate marketers fail, most individuals seek facts to prove the legitimacy of affiliate marketing. But is affiliate marketing worth it in 2023?

Alternatively, local lead generation deals with digital assets like websites. There are fewer scammers and fraudsters because you’re not dealing with physical products. Affiliate marketers have to be vigilant about fake products, fake traffic, and fake leads. In local lead generation, your target market is ready to buy. You just need to rank your websites organically and implement strategic attraction marketing. Once local leads are flowing to your sites, you can then forward them to business owners to make significant passive income monthly.

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 2023 Benchmark Report, the affiliate marketing industry is projected to grow to $14.3 billion in 2023 and $15.7 billion in 2024.

5. Affiliate Marketing is Worth It in 2023

An affiliate marketing business is worth it in 2023 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 2023 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:

Is Affiliate Marketing Scam or Legit?

Affiliate marketing is legit. It’s an online business that generates money through sales referrals. However, affiliate marketing scams and frauds have diluted people’s perception of this business model. In fact, many successful affiliate marketers like Finch Sells, Missy Ward, and Ian Fernando are well-known because of how transparent and legitimate they are in the affiliate marketing industry. There are also legitimate affiliate programs from established companies, such as Amazon Associates, ShareASale, and CJ Affiliate.

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 2023. And according to Google Trends, online searches for “affiliate marketing” hit the 85% mark from 2016 to 2023.
  • 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 2023. 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 2023? Yes, affiliate marketing is legit in 2023. 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 2023 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

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