David Gasparian is the founder and president of Phonexa , an all-in-one marketing package for calls, leads, clicks, email, SMS, accounting, and more.
The demand for affiliate marketing is growing.
The industry is expected to grow from $13 billion in 2022 to $15.7 billion in 2024, according to the Center for Influencer Marketing's 2022 Marketing Performance Report.
In spite ofa glob upon it in the area of compliance and consumer protection laws, the affiliate marketing industry faces various challenges and issues. With new regulations and amendments to existing regulations coming into effect sometime in 2023, affiliate marketers must ensure full compliance to avoid harsh penalties.
As the founder and president of a company that offers a complete suite of automated marketing solutions, I have gained experience working with a variety of affiliate marketers across multiple verticals.
In my opinion, here are some strategies that every partner should consider to ensure full regulatory compliance to protect their brand and business.
1. Maintain your brand as a trusted affiliate.
Regulatory compliance not only protects consumers, but also your brand and ultimately your reputation as an affiliate marketer.
As your affiliate network grows and you recruit new ones to reach more consumers, it becomes difficult to keep track of all your affiliates. The potential for unethical behavior and inconsistent practices in this highly competitive industry makes it difficult to track affiliate performance.
An effective way to ensure that your affiliates represent your brand consistently and transparently is to create and implement a brand style guide that details your affiliate network's compliance policy. This Brand Style Guide will help you keep your colleagues honest by explaining the actions and behaviors prohibited by your Network Terms
2. Prevent fraud with non-compliant partners.
Deceptive methods used by non-compliant affiliates not only damage the reputation of the affiliate network, but also allow them to bypass the network of illegally obtained commissions.
Unethical methods used by non-compliant affiliates to increase commissions include the following.
• URL hijacking - redirecting traffic from a site to an affiliate site.
• Cookie stuffing: "insert" affiliate tracking cookies into the browser without user consent to get commission fraud.
• Blatant Misrepresentation: Misrepresenting a product or service to increase conversion rates.
• Push Spam - Use bots to "pump" traffic, clicks and signups
To prevent fraud due to inappropriate practices, consider monitoring your partners' IP addresses. Monitoring IP addresses can help detect suspicious activity or fraud by partners to increase sales and earn higher commissions.
3. Reduce regulatory and compliance risks.
Some merchant partners may not distinguish between compliance risk and regulatory risk, but understanding the difference between the two is important.
Regulatory risk refers to the possibility of changes in laws and regulations. Because these changes are outside of your control, regulatory risks can often lead to business interruption and additional costs to ensure full compliance with consumer protection laws and regulations.
Below are some examples of regulatory risks that may affect your affiliate network.
• Compliance with antimonopoly legislation.
• CCPA.
• HIPAA.
Sarbanes-Oxley Act of 2002
Regulatory risk management requires forward thinking and effective strategies that enable companies to monitor and keep pace with changing regulatory requirements. This approach provides full transparency of your network's operations and can help influence public perception of your brand.
Compliance risks include potential violations of applicable laws or industry regulations that may result from inadequate controls or failure to follow established best practices.
Mitigating risk requires a structured approach to ensure full compliance with your affiliate network's policies, procedures and risk management. Mitigating compliance risk is critical, especially with new consumer privacy laws and regulations coming into effect in 2023, including the Virginia Consumer Data Protection Act (VCDPA), Connecticut Personal Data Privacy Act (CTPA) and online monitoring) and CPA (Colorado Privacy Act). Law). ) among others.
4. Use technological tools to comply with regulatory laws.
As technology continues to evolve, tools and platforms are designed to ensure full compliance with applicable regulatory laws. Currently, branches can use a compliance management system equipped with real-time notifications to detect compliance violations and reduce compliance risks. Technology tools combined with internal regulatory initiatives can help affiliate networks achieve full compliance and avoid harsh penalties for violations.
Final thoughts
Affiliate marketing is a boon for both publishers and advertisers, as evidenced by the growth of affiliate marketing spending in the United States from 2010 to 2022. Find the right partners to help promote your brand to customers and share ideas (or resources) with you.
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