Click fraud involves deliberately clicking on paid advertisements not to purchase the product or service, but to “fool” the online advertiser into paying a PPC fee. There are two main types of click fraud: affiliate and competitor. Affiliate fraud occurs when an advertiser affiliate (publisher) tries to boost revenues by intentionally adding irrelevant clicks on the ad or link displayed on their website. The affiliate increases short-term revenues and the actual advertiser receives meaningless clicks, but not site traffic or sales.
Competitor fraud features companies trying to undermine their competitor’s search engine rankings by sponsoring ads or links associated with relevant and valued search terms; in such instances, competitors are compelled to spend lots of ad money with no return, often deducing that the search term is not profitable and consequently dropping out of term bidding.
Click Fraud is an important issue in the world of search, particularly with pay-per-click (PPC) advertising now a potent advertising venue. Some search experts claim that fraud losses are minimal, while others assert that almost half of paid-for clicks are misleading. Regardless of whether you view click fraud as an exaggerated or real threat, there are several measures which advertisers can employ to combat it:
ü Have savvy marketers monitor the effectiveness of individual ads and search terms. The following areas should be carefully examined: advertisement costs; number of clicks; number of conversions; actual sales, or Return On Investment (ROI); Source Internet Protocol Addresses; and rankings across major engines for the affiliate site. Affiliate sites engendering feeble, sharply decreasing or negative returns should be suspect, as well as those generating lots of new clicks but without appropriate levels of conversion and sales. If the ad has not changed but your numbers have, then something might be amiss.
ü Direct your marketing experts to also gauge the effectiveness of the affiliate site in question, specifically examining its rankings across the major engines as well as Source Internet Protocol Addresses. Low engine rankings should raise an alarm, as should lots of clicks originating from the same IP address or from addresses outside the country you are advertising in.
ü Consider purchasing and employing click fraud detection hardware, to get a better handle on this often hard-to-detect activity and to better identify trends in fraudulent activity. Beware, however, that click fraudsters have been increasingly successful at discovering new ways of “beating” such software.
ü Record any and all instances of suspected click fraud and contact the PPC engine right away. Major search engines such as Google and Yahoo are very motivated to cooperate with advertisers and promptly refund meaningless clicks, once identified.
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