PPC Click Fraud

What is PPC click fraud? Is click fraud a serious problem? What are search engines doing to prevent click fraud and what can you do?

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We are frequently asked about PPC click fraud. Justifiably, many advertisers are concerned that they are spending their advertising budget on fraudulent clicks and the frequent reports in the media (some claiming that as much as 30% of paid-for clicks are fraudulent) give cause for alarm.

What is click fraud?
Click fraud can be defined as any malicious attempt to drain an advertiser’s ppc budget. There are a couple of likely sources of click fraud:

  • a rival advertiser who is trying to increase their competitors’ marketing costs by clicking on their ads
  • adsense publishers who are trying to increase their revenue

Both such sources of fraudulent clicks may be generated by humans or technological means (e.g. automated clicking software).

Another form of click fraud that is not as widely discussed is that of impression fraud, where attempts are made to significantly increase the number of impressions for particular ads, but never actually click on them.

The intention of impressoin fraud is to reduce the ads’ quality score by lowering the click through rate (CTR). The net effect of a reduction in quality score is likely to be lower rankings, higher bid prices and possibly the removal of the ad altogether.

Should you be worried about click fraud?
With the media spotlight on the issue, it is absolutely natural to be concerned if you are investing money in PPC advertising.

The cost per click (CPC) advertising model is inherently vulnerable to click fraud. George Reyes, chief financial officer at Google, stated “Click fraud is the biggest threat to the Internet economy”.

All the major search engines rely on advertising revenue to survive and they acknowledge the potential threat that click fraud poses. George Reyes’ suggestion that Google’s entire business model is at threat is no exaggeration, but this is why we believe that, as advertisers, we must turn to the networks to respond to the threat.

What are the networks doing to prevent click fraud?
All credible advertising networks boast robust measures, both automated and human processes, to identify and prevent click fraud.

Google has established a ‘click quality team’ that is tasked with the responsibility of monitoring invalid clicks / impressions and actively removing the sources of such activity.

Increasingly complex software is being developed to identify possible fraudulent clicks and it will be increasingly difficult to cheat the system on a large scale.

Any adwords advertisers will be familiar with refunds given by Google for low quality clicks and you can now see more detailed information on the volume of invalid clicks

There can be no doubt that the search engines take click fraud very seriously and they openly discuss the issue.

What more can you do?
Whilst we believe that the ultimate responsibility for combating click fraud rests with the search engines, there are a few basic steps that all advertisers should take to help reduce the risks:

  • be aware of the threat. monitor traffic very carefully. Ensure that you have a robust analytics package that allows you to identify drops in conversion with corresponding peaks in paid search traffic.
  • watch out for impression fraud. If campaigns have been running successfully for some time but you suddenly notice that terms have been deactivated because of low CTR, it may indicate impression fraud.
  • compare the stats from the PPC networks to your own web stats and ensure that there are no large discrepancies
  • report any possible fraud to the search engines. If you are suspicious, share your concerns with the network as they will help identify and therefore remove the source of possible illegal behaviour.

Click fraud is a concern but measures are in place to counter the threat. Vigilance is required but we do not believe that there is sufficient threat to stop PPC advertising.

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