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Fraud Fears Loom, but Performance Marketing Booms

Posted on 5.05.2013

The affiliate/performance marketing space has always been one that the entire Web seems to look down its virtual nose at – and sometimes for good reason.

While the vast majority of affiliate marketers seem to be fine, upstanding Internet professionals, there remain a few that continue to abuse the model. Two well-known affiliates (Shawn Hogan and Brian Dunning), who eBay is claiming bilked them of millions of dollars using nefarious tactics such as cookie stuffing, are the latest accused perpetrators of fraud in the affiliate space.

Hogan and Dunning are far from your normal affiliates, but companies which still engage in the performance marketing practice (Internet retailers and online advertisers) likely won’t be dissuaded by this event or any event of that nature in the future. Why? Well, it works really well from a performance standpoint – particularly for those with limited budgets or those that are fed up with CPC and display advertising, social media and email. And the affiliate marketing space is booming.

Performance marketing agency Experience Advertising released an infographic recently which highlighted the popularity of this particular tactic over the years and what advertisers and merchants should expect in the future.

The infographic revealed that affiliate marketing spending in the U.S. increased by 256% in 7 years (according to the U.S. Affiliate Marketing Forecast (2009-2014) by Forrester Research) growing from $1.6 billion in 2007 to $4.1 billion (estimated) in 2014. And according to the IAB Affiliate Marketing Council, 77% of advertisers increased their affiliate marketing spend this year, while 71% expect to grow their spend in the future. And this growth occurred despite pervasive fears of fraud.

Interested in learning more about the digital world of affiliate marketing? Check out Website Magazine's Affiliate 360 book, a practical guide to ethical performance marketing for brands both large and small.

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