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The Cost Of Click Fraud
By Stan Hauser, Sat Dec 10th
The Cost Of Click Fraud One of the biggest threats to the continued growth of SearchAdvertising is the increasing plague of click fraud. Althoughthere are varying forms of click fraud, most people define it asany click generated, and paid for, where the intent is to drainthe advertiser’s budget. Advertisers know some clicks are morequalified than others, and not every visitor from their PPCcampaigns will convert to a customer. But, they have a right toexpect that the traffic they are paying for is coming frompeople at least marginally interested in their products orservices. What Motivates Click Fraud?
Why does click fraud exist? What motivates people to deceive thesystem by sending PPC advertisers bogus traffic? The shortanswer (as usual) is money. Many Pay Per Click Advertising networks are partially, (or insome cases totally), dependent on affiliate sites to generatetraffic for their advertisers. These networks syndicate theircustomer’s ads so they will appear on the sites of theiraffiliates. Every time someone clicks on an ad the PPC Networkand the affiliate site share the revenue. The more clicks theaffiliate site generates, the more money it makes. While thevast majority of affiliates are legitimate trustworthy sites,others are in the business of exploiting loopholes in the systemto line their pockets with real money by generating fake clicks.Often times the weapon of choice used by these rogue sites tocheat the system is a software script that automatically clickson PPC ads. Another variation of click fraud uses a more personal touch tosteal advertiser’s money. In the hyper-competitive world of PayPer Click Advertising the battle for premium positioning at anaffordable cost can cause companies to use less than ethicaltechniques to gain an edge. Companies can drive up theircompetitor’s marketing costs by clicking on their Pay Per Clickads. If their competitor’s marketing costs get too high they maylower the bids on their keywords, or stop bidding on the wordaltogether. Either way, the cost for the word goes down, givingthe fraudulent company an opportunity to increase their rankingon the page at a lower cost. The Search Engine’s Response To Click Fraud. All the Pay Per Click Search engines have systems in place todetect click fraud, and screen questionable clicks. One exampleof how they do this is by keying in on the IP address where theclick originated from. If they see too many clicks coming formthe same IP in a short period of time they will often screen thetraffic. The
Search Engines are in a unique position when it comes toClick Fraud. On the one hand they benefit from it. The amount ofrevenue attributed to Click Fraud varies depending on who youask, but everyone agrees that if illegitimate clicks werecompletely eliminated, all the major Search Engines would suffera significant hit to their revenues and stock prices. However,the Search Engines also realize that the long term health of theindustry depends on establishing trust with their advertiserbase. Going forward we can expect to see Search Engines deployincreasingly sophisticated methods to eliminate fraud, andcorresponding responses from the dark side of the SearchAdvertising industry. Decreasing The Amount OF Click Fraud For Your Campaigns. While it’s impossible to completely eliminate fraudulenttraffic, there are some things you can do to increase thepercentage of good traffic from your investment in Pay per ClickAdvertising. As a rule of thumb, the more a Pay Per Click Ad network dependson affiliates for its traffic, the more susceptible it will beto fraud. The reason why the overall traffic quality is betteron Google, Yahoo and Lycos is that each of these sites has theirown branded destination where consumers go to search. If youadvertise on these sites you know where your ads will appear(although even these bigger sites use affiliates to varyingdegrees). Once you venture into the second tier Pay Per Clicknetworks however you’ll find that almost all of their traffic isgenerated through partner sites. Companies like Kanoodle,Enhance etc…don’t own sites where people go to search the web.Nearly all their traffic is generated through their affiliateswhich makes it more difficult to control fraud. Conclusion: Unfortunately, click fraud is a necessary evil of Pay Per ClickAdvertising, at least for now. However, as with most aspects ofPPC Advertising everything eventually boils down to conversionsand profits. If your campaigns are generating enough qualitytraffic to meet your conversion metrics you should continue toinvest in the campaign, even if some of the clicks are fake. Ifyour traffic is riddled with too many automated clicks it willeventually become obvious in your conversion numbers, and youshould stop the campaign and put your money into pay Per Clicknetworks that control more of their own traffic. About the author:Stan Hauser is a leading expert in effective Pay Per ClickAdvertising strategies, and the creator ofhttp://www.pay-per-click-advertising-guide.com |
