Many merchants rely on affiliate advertising networks to direct traffic to their website. Affiliate sites, often as part of a network, post links or referrals to the merchants’ websites. The merchant pays the affiliate – typically on a pay-per-click (PPC) or commission basis. Big players in the affiliate space include: LinkShare, Google, Amazon, PeerFly, ClickBank, and many others.
Affiliate fraud occurs when an affiliate site abuses the PPC or commission based advertising model by “farming” clicks or initiates fraudulent purchases to collect unearned commissions.
“Click farming” is the practice of running a computer designed to “click” links on the affiliate’s web page. This generates pay-per-click revenue for the affiliate, paid by the merchant. However, the merchant derives no value from the clicks because there is no customer.