The Cost Of Click Fraud

One of the biggest threats to the continued growth of Search Advertising is the increasing plague of click fraud. Although there are varying forms of click fraud, most people define it as any click generated, and paid for, where the intent is to drain the advertiser's budget. Advertisers know some clicks are more qualified than others, and not every visitor from their PPC campaigns will convert to a customer. But, they have a right to expect that the traffic they are paying for is coming from people at least marginally interested in their products or services.

What Motivates Click Fraud?

Why does click fraud exist? What motivates people to deceive the system by sending PPC advertisers bogus traffic? The short answer (as usual) is money.

Many Pay Per Click Advertising networks are partially, (or in some cases totally), dependent on affiliate sites to generate traffic for their advertisers. These networks syndicate their customer's ads so they will appear on the sites of their affiliates. Every time someone clicks on an ad the PPC Network and the affiliate site share the revenue. The more clicks the affiliate site generates, the more money it makes. While the vast majority of affiliates are legitimate trustworthy sites, others are in the business of exploiting loopholes in the system to line their pockets with real money by generating fake clicks. Often times the weapon of choice used by these rogue sites to cheat the system is a software script that automatically clicks on PPC ads.

Another variation of click fraud uses a more personal touch to steal advertiser's money. In the hyper-competitive world of Pay Per Click Advertising the battle for premium positioning at an affordable cost can cause companies to use less than ethical techniques to gain an edge. Companies can drive up their competitor's marketing costs by clicking on their Pay Per Click ads. If their competitor's marketing costs get too high they may lower the bids on their keywords, or stop bidding on the word altogether. Either way, the cost for the word goes down, giving the fraudulent company an opportunity to increase their ranking on 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 to detect click fraud, and screen questionable clicks. One example of how they do this is by keying in on the IP address where the click originated from. If they see too many clicks coming form the same IP in a short period of time they will often screen the traffic.

The Search Engines are in a unique position when it comes to Click Fraud. On the one hand they benefit from it. The amount of revenue attributed to Click Fraud varies depending on who you ask, but everyone agrees that if illegitimate clicks were completely eliminated, all the major Search Engines would suffer a significant hit to their revenues and stock prices. However, the Search Engines also realize that the long term health of the industry depends on establishing trust with their advertiser base. Going forward we can expect to see Search Engines deploy increasingly sophisticated methods to eliminate fraud, and corresponding responses from the dark side of the Search Advertising industry.

Decreasing The Amount OF Click Fraud For Your Campaigns.

While it's impossible to completely eliminate fraudulent traffic, there are some things you can do to increase the percentage of good traffic from your investment in Pay per Click Advertising.

As a rule of thumb, the more a Pay Per Click Ad network depends on affiliates for its traffic, the more susceptible it will be to fraud. The reason why the overall traffic quality is better on Google, Yahoo and Lycos is that each of these sites has their own branded destination where consumers go to search. If you advertise on these sites you know where your ads will appear (although even these bigger sites use affiliates to varying degrees). Once you venture into the second tier Pay Per Click networks however you'll find that almost all of their traffic is generated 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 affiliates which makes it more difficult to control fraud.

Conclusion:

Unfortunately, click fraud is a necessary evil of Pay Per Click Advertising, at least for now. However, as with most aspects of PPC Advertising everything eventually boils down to conversions and profits. If your campaigns are generating enough quality traffic to meet your conversion metrics you should continue to invest in the campaign, even if some of the clicks are fake. If your traffic is riddled with too many automated clicks it will eventually become obvious in your conversion numbers, and you should stop the campaign and put your money into pay Per Click networks that control more of their own traffic.

Stan Hauser is a leading expert on effective Pay Per Click Advertising strategies, and the creator of http://www.pay-per-click-advertising-guide.com

In The News:

Full Service PPC Management  JumpFly PPC Advertising News
Google PPC Ads in a Nutshell  Business 2 Community
Growing Your Business through PPC  JumpFly PPC Advertising News
9 Headline Hacks for Paid Search  JumpFly PPC Advertising News
All about Google Ad Strength  JumpFly PPC Advertising News
5 PPC Trends to Get Ready for in 2020  Search Engine Journal
A Complete Guide to PPC Ad Formats  Search Engine Journal
5 Innovative PPC Tactics to Try Today  Search Engine Journal
What is PPC?  Startups.co.uk
The Top 7 PPC Strategies for 2019  Social Media Today
Creative Specs for Facebook and Instagram Ads  JumpFly PPC Advertising News
Comparing SEO to PPC  Practical Ecommerce
7 Great Ways to Work with Your PPC Agency  JumpFly PPC Advertising News
SEO vs. PPC: A Few Forgotten Truths  Search Engine Journal
Free PPC Audit  JumpFly PPC Advertising News
How to run a PPC campaign  Startups.co.uk
4 Ways to Prepare for PPC in 2020  Search Engine Journal

How to Help Google Make Up Its Mind

As an AdSense sponsoring web site, your goal is to... Read More

Disguise Your ClickBank Affiliate Links Using Status-bar Faking

Many surfers are savvy enough to identify ClickBank affiliate links,... Read More

When Adsense Makes No Sense: Knowing When Not To Use The Google Adsense Pay-Per-Click Program

Google's AdSense program is a proven money-maker that has enriched... Read More

How to Save Money on the Adwords Network

Over the years I have had many accounts with Adwords,... Read More

Find Powerful Keyword Phrases in Five Easy Steps!

You may not realize it, but in the next few... Read More

7 Great Ways to Lose Your Shirt Using Google Adwords!

Google Adwords is a great tool! Careful use can lead... Read More

How to Increase Your Adsense Revenue

If you're a webmaster, you've probably heard about Google's Adsense.... Read More

Buying Your Way to the Top with Pay Per Click Advertising

Imagine if you could advertise ONLY to people who have... Read More

Broad, Phrase, Exact, Negative - Four Google AdWords Terms You Must Know for Advertising Success

A few days ago, I was setting up my latest... Read More

Keyword Prices Decline 3.0% in the First Quarter of 2005

An analysis of web's most popular 20,000 keywords by TopPayingKeywords.com,... Read More

Choosing the Right Keywords for Your Pay Per Click Advertising Campaign

Introduction:Of all the important decisions that go into a successful... Read More

What is Google AdSense?

AdSense may be one of the fastest and easiest ways... Read More

Wimpy Google and Michael Jackson: Birds Of A Feather

Google Inc. is suing a Houston-based company for allegedly clicking... Read More

How to Master Google AdWords - Part 2

4. Write an attractive ad - you have a very... Read More

AdSense - 7 Keys To Empire?

There's a lot of buzz around about how you can... Read More

Tips for Maximizing AdSense Revenue

Google's AdSense program is probably the best affiliate program on... Read More

Double Your Adsense Income in 60 Minutes

Google's Adsense is one of the most powerful weapons in... Read More

How to Maximize Paid Search Results

Because of increasing competition that has led to higher advertising... Read More

Pay Per Click Web Advertising Power Word Secrets Revealed

First impressions affect your relationship with someone for life. In... Read More

Protect Your ClickBank Products from Online Theft

One of the biggest problems faced by ClickBank merchants is... Read More

Optimizing Adsense For Better Performance and More Money!

So you want to make money with Google Adsense? I... Read More

Meet Adwords, AdSenses Fraternal Twin

AdSense is one of the best ways to monetize your... Read More

How to Make Every AdSense Ad on the Google Network Pay You!

Wouldn't it be great if every keyword in Google's entire... Read More

Top 5 Secrets to Making Money with Adsense

Did someone tell you you can make money easily with... Read More

Make Free Money With Google

Have you received your check from Google? If you own... Read More