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Click Fraud and How to Deter It
By Hollis Thomases

Pay-per-click (PPC) advertising continues to gain popularity in
the online marketing (http://www.webadvantage.net) world as an
effective and inexpensive way to drive targeted visitors to web
sites. Research firm eMarketer reported that between 2002 and
2003 the paid search listing market grew 175 percent. Major
trusted search properties such as Google, Overture, FindWhat.com,
and Kanoodle, all offer PPC campaigns in which you pay only when
someone clicks through your banner ad or link. But PPC also has
an enemy--click fraud--and understanding what it is and what to
do about it should also be a key part of your PPC campaign.

What is Click Fraud?

Click fraud is when someone or something generates illegitimate
hits on your banner or text advertisement causing you to pay for
worthless clicks. As PPC campaigns have grown in popularity and
keyword prices and bidding have become more competetive, click
fraud is on the rise.

Online marketers are becoming increasingly worried about the
prospect of click fraud. According to CNET News, some marketing
executives estimate that "up to 20 percent of fees in certain
advertising categories continue to be based on nonexistent
consumers in today's search industry."

This estimate is certainly unsettling for advertisers who,
recently, have been paying hefty amounts bidding on desirable
search terms. Financial analysts report that in the year 2004
advertisers were paying an average of 45 cents per click.
Compare this to 40 cents in 2003 and 30 cents in 2002; the
bidding wars continue to rise.

Who's Doing it and Why?

Click fraud perpetrators are most often motivated by trying
to increase revenues from affiliate networks or attempting to
damage competitors' revenues by forcing them to pay for worthless
clicks. The Google Adsense program, in which affiliates receive
payment for clicks whether they are real or not, has caused
great concern for Google and has intensified its focus on click
fraud.

Those engaged in click fraud use a variety of techniques to
generate false clicks. Low cost international workers from all
over the world are hired to locate and click on ads. The Times
of India provided investigative reporting on payment for manual
click fraud happening in India. Unethical companies may pay
their own employees to click on competitor ads. Last but not
least, click fraud can be generated by online robots programmed
to click on advertiser or affiliate ads. Some companies go to
great lengths creating intricate software that allows for this
to happen.

How Can You Deter It?

Many advertisers know about the possibility of click fraud but
generally haven't done much in the past to prevent it. Some feel
that if they complain to any of the search conglomerates, it
could ruin their free listings. Others feel like the problem is
beyond them.

"It is a bigger problem, but folks just don't want to take the
time to track it down because it's a complex problem," stated
John Squire, of web analytics firm Coremetrics, to CNET. "Given
that some of the largest marketers manage up to 1 million
keywords in a campaign the data can be difficult to crunch."

Companies who do understand and report click fraud to search
engine properties have had success receiving refunds for
fraudulent clicks. For those advertisers who want to address the
possibility of click fraud in PPC campaigns, good options do
exist. At the most basic level, advertisers can use general
auditing; many have been known to compile lists of sites that
generate high numbers of clicks but not sales. This will indeed
put up a red flag.

On the other hand, because click fraud is advancing at such
frequency, click fraud detection companies and software have
been popping up all over the country. Let's take a look at some
of the options:

ClickDetective - ClickDetective allows you to track return
visitors to your site and alerts you if there is evidence that
your site may be under attack. Its reports show you every click
in real time rather than a summary hours later.
(http://www.clickdetective.com/)

Who'sClickingWho.com - This fraud detector tracks all PPC search
engines, detects multiple IP's, and even pops up a "ClickMinder"
after a potential abuser clicks repeatedly over five times.
(http://www.WhosClickingWho.com)

BogusClick - BogusClick can help advertisers determine
competitor IP addresses, originating PPC search engines and/or
partner sites involved, as well as keywords used.

Editorial Note: The BogusClick.com appears to have been
suspended since this article was written.

Clicklab - Clicklab employs a score-based click fraud detection
system that applies a series of tests to each visitor session
and assigns scores. Calculations are made to indicate bad/good
sessions to show an advertiser the quality of traffic.
(http://www.clicklab.com/)

Click fraud is a big problem in search engine marketing
(http://www.webadvantage.net/market_searchopt.cfm) that's only
going to get bigger in the future. It is wise for any online
advertiser to implement some auditing system. Why continue to
waste precious campaign money?!

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Hollis Thomases is the President of Web Ad.vantage, Inc., an
online marketing firm (http://www.webadvantage.net) specializing
in search engine optimization
(http://www.webadvantage.net/market_searchopt.cfm), paid search
engine marketing, and online media buying
(http://www.webadvantage.net/market_mediabuy.cfm). The Web
Ad.vantage Inc. site was named by Forbes magazine one of its
"Best of B2B Sites" for media and advertising. An award-winning
entrepreneur, Hollis Thomases has been honored by CNN and is
also a contributing writer to ClickZ.
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