Click fraud is an ever growing threat to advertisers who use pay per click advertising – the advertising model most commonly used to advertise on the Internet. In the pay per click model, usually abbreviated as PPC, advertisers pay an agreed upon sum each time a visitor to a web page on which their ad is displayed clicks on that ad to visit their web site. The most commonly known PPC advertising providers are Google (AdSense and AdWords) and Overture (Yahoo’s advertising partner). The ads may be displayed on search engine results pages, or they may appear on the web pages of the company’s affiliate partners as context sensitive ads.
How Pay Per Click Works
Suppose your company sells basketball hoops and you’d like your ad to be displayed whenever someone searches for ‘basketball hoops and backboards’. You bid $.24 on that keyword or phrase. If yours is the only or highest bid for that phrase, then any time someone types ‘basketball hoops and backboards’ into the search box, your ad will be displayed on the page right beside the search engine listings. In return, you have agreed to pay the provider 24 cents any time that someone clicks on your ad.
Pay Per Click and Context Sensitive Advertising
In addition to featuring your ad on their own search engine pages, many of the PPC providers accept ‘partners’, smaller web sites with established readerships. These publishers agree to put ads on their pages, and are paid by the PPC provider for every click that sends someone from their page to yours.
How Click Fraud Subverts the Pay Per Click Model
The pay per click system assumes that most people who click on your ad do so because they have an interest in your product. It’s expected that only a percentage of those who click through will actually buy something, but by delivering the ad to a targeted audience – people who have already expressed an interest in the product that you sell – you substantially increase the chance that someone a) someone will click on your ad and b) those that click on your ad will buy your products.
The problem with the PPC model is obvious to most people – because you are paying per click, someone who is intent on costing you money can drain your advertising budget simply by clicking on your ad repeatedly, knowing that each time he does it, he is costing you 24 cents. That may seem like small potatoes, until you add in some very sophisticated software that can remotely click on your ad thousands of times per minute – from hundreds of different computers around the globe.
Once Google popularized context sensitive ads through the AdSense program, another layer of incentive got added. Because publishers get paid for each click on your ad from their site, they have a powerful motive for fraudulently obtaining clicks on the ads on their site. These methods range from openly asking people to click on ads to help increase revenue to the site to sophisticated software that sends multiple clicks on an ad per hour to boost the click-through ratio on their ads.
The Fallout of Click Fraud
The estimates of the cost of pay per click fraud runs into the billions of dollars. At the low end of those estimates are Google’s own numbers. They use a software filter to weed out those clicks that are most likely to stem from fraud and leave them off the bill that they send to advertisers, At the high end are advertisers and their advocates who claim that up to 50% of clicks on their ads are fraudulent. The reasons for the discrepancy are many. It’s accepted for instance that the click fraud rates on some sets of keywords is considerably higher than the average, which means that both Google and the advertiser could be right. There’s also the difference in what might be considered a fraudulent click – no one but Google and Overture know what their metrics are for determining whether or not a click is fraudulent. Nor are they willing to part with their own numbers on the prevalence of click fraud. Without those numbers, it’s impossible to determine the full extent of what click fraud costs advertisers.
How Community Can Make a Difference
Click fraud is a multi-faceted problem, It costs ALL advertisers, it costs Google, and ultimately, it costs legitimate publishers in lost ad revenues. Anyone who has worked in law enforcement and loss prevention in the brick and mortar world can tell you that community involvement in policing efforts is one of the single most effective crime deterrents in existence. As a community of concerned web publishers and advertisers, we can:
By sharing information and support, we can make a difference and put a major dent in the losses due to click fraud.
By Jay Stockwell
Click Sentinel Founder
Fighting Click Fraud Together
Join our power packed PPC newsletter and get our FREE 12 part course: 