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“I think that something has to be done about this really quickly, because I think potentially, it threatens our business model”. Google CFO George Reyes.
What if I told you that up to 30% of the clicks you receive through Googles Adword or AdSense campaigns may be fraudulent clicks? What if I told you that millions of dollars are being lost monthly because of pay per click (PPC) fraud? Click fraud is defined as any paid-for-click that originates in a malicious attempt to drain an advertisers budget. Click fraud is growing by leaps and bounds especially where high priced search terms are involved. So, why can’t Google or Yahoo do anything about this? Can’t they track the same IP’s hitting the same ads over and over?
Unfortunately, things aren’t that simple. There are several ways criminals are defeating Google and Yahoo’s PPC filtering system.
The first way is “click farms”. Click farms have been found in India, China and Nigeria. Click farms are simply large groups of individuals that are paid a commission to click on advertisements all day long. They are taught to wait at least 60-90 seconds between each click, so that it is more difficult to detect. Click Farm workers generally earn a commission of $7 for every $50.00 earned. When you visualize a Click Farm, you envision thousands of workers in a warehouse busily clicking away. In India, most Click Frauders work from their home. They are generally emailed with a list of ads that they should focus on. Unfortunately since there is no centralized location, it is difficult to put a stop to this activity. Click-fraud criminals are using rolling-IP distributed attacks from multiple countries.
Secondly, Software and Click Bots. Hundreds of companies are now putting out software that surfs the web and clicks on Google and Yahoo advertisements. You can simply add your competitor’s keywords, suspend your own campaign for a day, and release your software. The software is able to disguise it’s IP address, sometimes giving the resultant page as a 404 error. (Which means page cannot be found) This software is able to use advanced cloaking technologies that can easily circumvent the preventive systems.
Third is Affiliate click fraud. Let’s say that you own a store named “Watches R-US” that sells high price watches. You decide to advertise on Google by using Googles AdSense program. (AdSense places ads on websites with topics related to the ad. You have probably seen FileMaker sites with “Amazon” advertisements down the side or top of the page. This is an example of AdSense) “Watches R-US agrees to pay $10.00 per click to Google. Google then looks for websites with relevant content. Google finds a blog named “Watch Review” and agrees to pay the blog $5 for every click the ad receives. “Watch Review” is actually a fraudulent site set up to exploit click fraud. It uses special software to repeatedly click on the ad from “Watches-R-US”, causing them to potentially lose thousands of dollars!
Fourth is impression fraud. Let’s say that you use the keyword “red stapler” and your competitor also uses the keyword “red stapler” because you both manufacture and sell red staplers. When and individual searches on the keyword “red stapler” Google displays the search results, along with the ads on the side of the page. Displaying this ad one time is called an “impression”. If no one clicks on the ad, Google records this information. Let’s say that over 1000 people search for “red stapler”, and your add displays 1000 times, (1000 impressions) and no one clicks on your ad. Most likely at this time, Google will say, your ad appeared 1000 times, with no traffic, and they will suspend that keyword. So, here is where impression fraud kicks in. The competitor will pause his keyword campaign, and then release software that will search for “red stapler” thousands of times. Constantly loading the page for “red stapler” and displaying his competitor’s ads. No one is clicking on his competitor’s ads, so Google suspends them. The fraudster that ran the software then turns his ads back on and when individuals search for “red stapler”, his companies’ ads are the only ones that display since Google suspended the other accounts. By committing impression fraud, they are able to obtain higher search rankings at lower cost and cripple their competition.
Google has a system that detects rapid fraudulent clicks, but has found the above techniques somewhat elusive. Google also issues refunds when it finds cases of abuse. Google is currently working on new technology, both software based and human based to put a stop to fraudulent clicks. Google Chief Financial officer George Reyes said in the Wall Street Journal, “Click fraud is the biggest threat to the Internet economy”. You would think Google would do everything in their power to fix this, but then you must remember that 99% of Googles income comes from Pay-Per-Click. This year, Google ended 2005 with 6.1 billion dollars in revenue. Yahoo earned an estimated 3.7 billion. That is nearly 10 billion dollars in click-through advertising. Amazing!
Recently a company named Incubeta created a software product to track fraudulent Clicks. The software tracks duplicate clicks by means of IP address, language, browser settings, referring URL, time of click, operating system, browser plug-ins and country. Incubeta decided to run a test on a series of campaigns. Campaign A was a finance company that paid ($1.00 - $2.00) per click. Campaign B was for a travel company who paid ($0.20-$0.30) per click. Campaign C was for a Job company that paid ($0.05 -$0.15) per click.
The three campaigns ran for a 10-day period, here are the results.
This random sample showed as much as 29.5% fraud. Most fraud activity seems to focus on higher priced keywords…. The keywords that are the highest in cost, and most affected, are the ones that are hardly ever refunded.
How can you avoid click fraud and impression fraud?
One of the most obvious ways is to monitor your click-through ratio to sales. While looking through our records, we found a company in Reston Virginia that had clicked on our site multiple times every day for a month. We then found another company in Canada that was doing the same thing. I run software on my server that allows me to see all of my web traffic in real-time as well as send them an instant message in real-time. After sending a message to each of the individuals constantly accessing my site, and asking if I could help them, they disappeared.
You can also implement click-fraud traffic tools and services. There are numerous tools available that will look for inconsistencies and irregular patterns in your click through traffic. I have listed several resources below.
Pay attention to search terms that have been deactivated by Google, especially keywords that were previously performing well. If your keywords had been performing successfully, and then have all the sudden been deactivated, it may indicate impression fraud.
Be sure to report click fraud immediately to Google/Yahoo. Google and Yahoo actually have very sophisticated tools that enable them to monitor and track click fraud. If your complaint is found to be valid, you will be refunded.
Be vigilant; monitor the traffic to your websites daily. There are numerous web analytics tools available. If your web host does not provide you with these tools as a part of their service offerings, make sure you use third party software.
Will click fraud ever be eliminated? Search engine giants Google and Yahoo say no. A simple case is Joe, the chief executive of an Internet marketing company, who enjoys having his staff click on the rival’s text ads on Google and Yahoo. He knows that every click is going to cost his competitor at least $15.00. Joe laughs and says that he doesn’t see any harm in what he’s doing, he simply feels like he is draining the competitions advertising budget.
So what changes will be made? Bill Gross, the man that invented PPC in the late 1990’s envisions the Internet going into a more “cost-per action” model. This would mean, that advertisers only pay for the “click” when a sale is actually generated or perhaps an individual subscribes to an online newsletter. This model would defeat click-fraud scammers, because individuals would not have to pay a penny for advertising if the click does not generate a sale. Google is currently working on an application called the “Google Wallet”. The way this would work is when a visitor clicks on an ad and makes a purchase; Google could process the payment to the advertiser. This way Google would become immune to click fraud scams.
No one believes that there is a catchall solution. Search engine giants realize that as soon as they create another form of security, it won’t be long before it too is exploited. Just as we are told in everyday life, you must be aware of your surroundings. Click fraud steals your hard earned money. Most of us are vigilant when it comes to reading our credit card statements to make sure the transactions are legitimate. If you use Google and Yahoo advertising, you should definitely give your online campaigns just as much scrutiny.
This article was written by Stephen K Knight. You may use this article on your website, or email copies to friends as long as the article remains in its completed form.
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