Click Fraud 101

Click fraud often comes up in discussions with clients and during training seminars. Is this something you should worry about? And what should you do if it happens to you?

Those of you who run PPC campaigns should arm yourself against this potential foe. Here’s how.

What is Click Fraud?

Most search advertising uses a PPC model, which means the advertiser is charged every time someone clicks on one of their ads. Click fraud is the term used to describe clicks that aren’t legitimate for some reason.

This could happen when someone places content ads on their own site and then clicks on them to get the affiliate revenue, or when a competitor purposely clicks on your ads to waste your ad budget. Most often, click fraud is the result of high tech bots or scripts that run in the background and click on ads without a user’s knowledge.

This a concern for advertisers and the search engines, which are interested in delivering qualified traffic to advertisers’ sites. If click fraud is detected and identified, then the engines generally end up with the short end of the stick. Yahoo Search Marketing’s Click Fraud FAQ explains click fraud and their click protection system.

Click Forensics just released some industry-wide PPC click fraud statistics for the first quarter of 2009. The overall industry average was 13.8 percent for Q1 2009, down from 17.1 percent for Q4 2008. The drop is mainly credited to search engines’ efforts to detect fraudulent clicks on their networks.

Who Would Do Such a Thing?

Some click fraud is associated with the advertisers’ competitors. Most advertisers have a daily budget, and when that budget is gone they will no longer display ads the remainder of the day. Enough fraudulent clicks can eat up that budget and keep them from displaying their ads while the competitor runs their ads free and clear.

Another facet of click fraud comes from publishers who self-click ads on their own sites to drive up revenue. Even more sophisticated are the programmers and hackers who create bots or scripts that spread via a virus or spyware that attempt to automatically click on ads without any user interaction or knowledge.

What Can You Do About It?

The first line of defense is to use a reputable search engine for your paid search campaigns. Search engines like Google, Yahoo, and MSN are actively looking at ways to detect and deter click fraud. These search engines often detect fraudulent clicks and never charge advertisers for them.

Publishers who self-click on ads or abuse the system are often detected and removed from the network. Search engines have a vested interest in providing users with good, qualified traffic, and are therefore committed to eliminating as much click fraud as possible in their networks.

The next thing you can do is regularly monitor your paid search clicks and site traffic using good analytics tools. In general, you want to look for patterns or spikes that are outside the normal traffic pattern for your site. Here are some specific symptoms that might indicate click fraud:

  • A sudden burst in traffic/clicks originating from a single IP address or location.
  • A sudden drop in conversion rates or the average time spent on your site of traffic coming from ad clicks.
  • A spike in traffic coming from other countries or regions that differ from normal traffic sources.
  • A sudden spike in the number of clicks for a particular keyword or ad.

If you think you’ve been victimized by click fraud, you can appeal to the search engine for a credit. The Google AdWords Invalid Activity Appeal shows you the kind of data you will need to collect when submitting a click fraud appeal.

Knowing about click fraud is important if you’re involved in PPC advertising. When working with search engines on click fraud, patience and politeness are important. These tips should provide you with the basic knowledge to combat click fraud.

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