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Click Fraud and How to Counteract It in Ad Campaigns
How Click Fraud Affects Advertisers
Part 2
By: Boris Mordkovich and Eugene Mordkovich
Originally Published: July, 2005
Continued From:
<<< The Growth of Click Fraud (Part 1)
Editor's Note:
This is chapter 6 of the book
Pay-Per-Click Search Engine Marketing Handbook, see the bottom of this page for ordering information.
How Click Fraud Affects Advertisers
We’ve seen how click fraud can quickly deplete an online advertiser’s PPC account, but let’s look a little bit closer into some of the ways that click fraud affects advertisers.
In addition to draining ad campaign accounts, click fraud can result in an increase in the cost per click for keywords. This happens because many PPC search engines base keyword pricing on how popular a term is and how many people are competing for it. Therefore, if click fraud is directed at a certain keyword, the cost of that keyword can increase for all advertisers, not just the particular competitor who may have been the target of the click fraud attack.
One notable case of click fraud affected an advertiser in a manner that few would have foreseen. John Carreras, President of Impact Displays, Inc., had long been a proponent of online advertising, but he suspected that his competitors were clicking on his paid ads. However, because he advertised so extensively across so many search engines, he decided the that problem was probably not large enough to justify the expense of analyzing his traffic logs in detail. And, perhaps, he was just being a little “paranoid,” as Carreras himself says.
However, after returning from a large trade show a few years ago, he checked his PPC ads and discovered that he had only about half the usual number of clicks during the trade show timeframe. Carreras found this disturbing enough to convince him that the reason for the decrease in his PPC clicks was likely due to the fact that his competitors were all at the trade show and thus not spending time clicking on his various ads.
Carreras responded a little bit differently than one might expect. Of course, this was before PPC search engines themselves were actively involved in pursuing click fraud, so Carreras decided to develop software designed to identify click fraud. After two years of development, he released a third-party tool called WhosClickingWho™, which remains one of the top tools available to advertisers today to combat click fraud.
As for Carreras’ own ad campaigns, once he put his software into practice on his own ads, his PPC ad campaign expenditures went down 20%, while his sales remained virtually the same.
Few advertisers have either the resources or the zeal to combat click fraud in the way that Carreras did, but many have benefited from his experience and the resulting software he developed. Other tools to combat click fraud have been developed since; we’ll discuss some of them later in this chapter.
The Sources of Click Fraud
So far, we’ve alluded to some types of click fraud, but a complete breakdown of the most prevalent sources and forms of click fraud will help clarify the range and potential impact different methods of click fraud can have.
Types of click fraud range from very simple to very complex and sophisticated. Here are some of the most common forms click fraud takes.
Automated Scripts
—although not the simplest form of click fraud, for someone with computer expertise, this method can be very effective, and quite simple to set up as well. The most famous case of this type of click fraud is still the Google Clique software. Basically, the fraudster creates a robot or au tom ated script that is specifically designed to click on paid advertising. This type of click fraud is used by both competitors and affiliates alike.
Hiring People To Click On Ads
—this means of perpetrating click fraud often originates from third-world countries. Ads are placed in local newspapers recruiting workers to spend time clicking on ads, according to directions supplied by the companies who organize these operations. Perhaps the most infamous operation of this type of “click farm” was identified by The Times of India in an article entitled “India’s Secret Army of Ad Clickers.” Especially interesting is that one online blogger who reported this story received 17 comments to his blog entry, most of which were placed by people seeking to find such jobs or by firms advertising that they were looking to hire workers for just such work. Although the companies that organize “click farms” realize that they are committing fraud, those working for them do not necessarily understand the significance of what they are doing and the impact it is having on overall Internet commercial activity. In third-world countries where annual incomes average a few thousand dollars, the additional income of $100 to $200 per month for a few hours work per day is very hard to resist, especially if the individuals involved are not computer literate enough to realize the implications of their actions.
Competitors
—your competitors have many methods of generating click fraud that do not involve “hitbots” or “click farms”. If you are competing for position on PPC search engines for a particularly expensive keyword, all a competitor has to do is to click on your ad a couple of times a day from his office computer, his home computer, a laptop, a friend’s computer, an Internet café, or any variety of easily accessed computers with different IP addresses in order to deplete your account and yet not attract attention to himself personally. In competitive industries, where the cost per click can be several dollars, if three to five of your competitors make fraudulent clicks on your ad several times a day, you can easily be losing thousands of advertising dollars a month. If your keyword cost is in the lower range, click fraud by your competitor(s) tends to be a little more complex and sophisticated.
Proxy Servers
—one of the most basic means of click fraud involves the use of repeated clicks on a PPC ad from the same computer. A person could theoretically sit at their computer and click on your ad, wait the appropriate amount of time for the PPC search engine to consider it a legitimate click, perhaps even visit a few of your pages and then exit your website. Bingo! One clickthrough deducted from your account. There are cases where people will complete this process repeatedly, without even bothering to go through the simple process of changing their IP address (the Internet Protocol number that is assigned to each computer). However, some people using click fraud in this manner use proxy servers to allow IP addresses to be changed randomly at certain intervals in order to make it appear as if the clicks are indeed coming from different computers.
Affiliate Programs
—affiliates are an increasing source of click fraud. Because of the specifics of how the affiliate system works (see the upcoming chapter on affiliate programs for details), affiliates have a version of the PPC ad on their websites. Because affiliates receive a percentage of the money generated by each click made on their website, they may see little or no harm in clicking a couple of times on the ad themselves to generate a little extra income on the side. However, affiliates who use “bots” to generate significant revenue via click fraud usually have to develop fairly sophisticated technology to get past the filters that many of the PPC search engines have in place for programs such as Google AdSense.
Impression Fraud
—currently, this type of fraud is only practiced successfully on Google-based ads, because of a clause in the Google terms of service. Here, usually using a robot, your competitor visits your website through normal means (not by clicking on your paid ad), thus artificially inflating your impressions and causing your clickthrough rate to drop. On Google, if your clickthrough rate drops below 0.5%, your ad will be disabled and your competitor can grab a top position at a much lower keyword cost. A secondary result of this type of fraud is that your website may be seen by the search engine as becoming less relevant, since you are getting a lot of impressions without clicks, which can lead to a shutdown of your ad campaign.
As stated earlier, these are just the most common means of click fraud. Some suspect activity may indeed be click fraud, but is subtle enough to be impossible to label it as such. For example, some advertisers notice that on occasion their ads are clicked much more often than usual, while their tracking shows that the visitors never go past the homepage to another area of the website.
Click fraud is definitely a phenomenon that is sometimes difficult to track, and innocent actions can sometimes be misinterpreted as click fraud. People do mistakenly click on an ad when they didn’t intend to and some people find it easier to click on a PPC ad to find out a company’s phone number than to consult an online yellow pages directory.
So how can you tell if you are a victim of click fraud, given that its very nature is somewhat amorphous?
Continued:
Detecting Click Fraud (Part 3) >>>
Continued From:
<<< The Growth of Click Fraud (Part 1)
Reprinted from
Pay-Per-Click Search Engine Marketing Handbook
The full book is available
directly from the publisher
or
from Amazon.
Copyright 2005 by MordComm, reprinted with permission.
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