I've been concerned with click fraud since the beginning of PPC times. That is probably because I was one of the early victims of click fraud -- once with Overture, and again with the early Google AdWords. This was back in 2002 and 2003.
Since then, I haven't witnessed any serious instance of suspicious traffic coming from Google, Yahoo, or Microsoft. Obviously, that doesn't mean there's no problem, far from it. But I honestly thought click fraud was mostly a thing of the past.
Until one morning this summer, when I choked on my toast and nearly died after reading the headline "Click Fraud Rise Or Fall? Click Fraud 22.9% Or 12.7%?"
How could such high percentages of paid clicks possibly be fraudulent? Shouldn't the FTC be all over this? Well, the FTC doesn't appear to be involved, and these are the published Q2 2009 results from two competing companies that monitor click fraud activity for a living.
Click Forensics, the more established of the two, says click fraud reached 12.7 percent in Q2 2009. That's down from 13.8 percent for Q1 2009 and from the 16.2 percent rate reported for Q2 2008. These numbers are high and could be scary to some, but they're more or less in line with Google's 10 percent overall invalid click rate.
Yahoo has also said their numbers are in line with Click Forensics. The difference may be explained by the fact that Click Forensics monitors traffic on Google and all other networks, which may not be as "safe" as Google for advertisers.
However, competing firm Anchor Intelligence, says the click fraud rate was actually a whopping 22.9 percent in Q2 2009, up from 21.7 percent in Q1 2009. That's just really hard to take seriously.
Facebook Accused of Click Fraud
Some advertisers even claim that PPC networks are encouraging, or even creating click fraud to inflate their revenue. For example, in July, Facebook was hit with two lawsuits claiming click fraud on their behalf (i.e., the plaintiffs are accusing Facebook of charging for clicks that never even occurred).
TechCrunch recently published a story on this topic that generated more than 230 comments, many from other advertisers crying foul.
What Google Does to Protect Their Advertisers from Click Fraud
Google is fighting click fraud attempts with technology and brains. All paid clicks go through a three-step system designed to filter out click fraud attempts.
1. All clicks are sent through algorithmic filters that detect the vast majority of click fraud attempts. Invalid clicks will still be sent to the advertiser's Web site, but the advertiser won't see any invalid clicks in their report, and they obviously won't be asked to pay for them. These aren't necessarily fraudulent in intent. Most of the time, they're quite innocent. For example, many visitors double click on links, or click back and trigger the AdWords tracking script a second time.
2. Offline Analysis focuses specifically on clicks that come from the AdSense program. This is done after the fact, and invalid clicks are credited. Google doesn't specify which clicks were credited, but they provide some information in the Click Quality Adjustments section of your billing summary.
3. Investigations are conducted when advertisers complain that they think they were victims of fraud. This is quite rare, according to Google. They state that less than 0.02 percent of clicks are reactively identified as invalid. In other words, Google claims that only two out of every 10,000 clicks are known to be invalid. And even these are credited back to the advertiser.
According to Google, this filtering process is quite efficient at identifying invalid clicks. While Google doesn't specify the exact percentage of all invalid clicks, they do say that it fluctuates from month to month, that it's always less than 10 percent, and that it has been more or less stable since 2002.
Does This Mean Click Fraud on Google AdWords is Only 0.2%?
Not even close. It's impossible to know what that number is at this time.
Obviously, Google does a lot to counter click fraud. But even so, their process leaves out one important possibility: invalid clicks that aren't detected proactively by Google's algorithms, and which aren't detected by the advertiser. This is obviously impossible to quantify, and arguably could be quite a large percentage of clicks.
On the other hand, third party firms such as Click Forensics and Anchor Intelligence often forget to include the word "attempted" when they speak of click fraud, as in "attempted click fraud." The word "click fraud" clearly implies that somebody's getting ripped off.
However, because they aren't tied in directly with the search engines' internal systems, they aren't in a position to know whether the advertiser is being charged for suspicious clicks. Clearly, AdWords advertisers aren't getting ripped off by 12.7 percent -- and definitely not by 22.9 percent.
This all points to the need for further and deeper collaboration between the search engines and third-party firms like Click Forensics to reassure advertisers that their money isn't spent after bad clicks.
You can see your own invalid click report by building a report with AdWords.