PPC Problems - Click Fraud
Pay Per Click advertising is a huge business, generating billions for the online ad market. Below is a chart from Lehman Brothers, notice “Search Advertising” is the largest form of revenue right now at over $11 billion in revenue.
Projected Online Ad Revenue
Because it is such a large market, with huge volumes and money at stake, it is vulnerable to click fraud.
What is Click Fraud?
Click fraud is when your PPC ad is clicked on for the purpose of generating money, resulting in a charge against the advertiser. There are 2 main motives for this:
1. Competitors: Competitors can click on your ads to run up your advertising costs disproportionate to your sales. This will reduce your ability to function as a company, likely result in the advertiser lowering their position allowing more sales for the competing offender.
In my previous businesses, I had been the victim of numerous click fraud attacks, we suspected from competitors. We worked with Google and Yahoo to get those charges back, but it took awhile. In the meantime, you are forced to put the ad money out first, until you receive your click fraud refund.
2. Money Makers: This group generates on PPC ads to earn revenue for themselves. Many PPC ads are displayed on other sites outside the search engines. For example, a web site can have Google ads run on their web site, and for every click generated, they earn a percentage commission.
This is extremely tempting to do and is easy money. In fact, there are software programs out there whose sole purpose is to click on web sites and generate this kind of revenue for the site. I also have known someone who told me, that in some third world countries, people are employed to click on ads all day long to earn $20 per month (a lot of money for some).
Although brokers of PPC ads have implemented security systems to prevent this type of thing from happening, they cannot stop this completely. Advertisers are left to fend for themselves finding it difficult to try and convince the “Big Companies” they are victims.
Yahoo and Google settled Click Fraud class action law suits.
I will also note, there is a serious absence of prosecution against click fraudsters, which tells me they can’t stop, or don’t want to stop this from happening, after all, it is more revenue for them. When I had my problems, they seemed to monitor the difference in traffic, and refund what they “guessed” was excessive. This worked becuase we are large advertisers, but to the smaller ones, I wonder how they fare.
Anyone else have this experience? Let us know about your take on click fraud.
Tags: click fraud, ppc