Posts Tagged ‘click fraud’

Click Fraud - No End in Sight?

Wednesday, January 28th, 2009

Techcrunch just wrote an article about click fraud.

http://www.techcrunch.com/2009/01/27/report-click-fraud-at-record-high/

It says that click fraud is at an all time high, possibly due to the economy problems. I actually suspected this before the article came out.

Even on reduced bidding, we have lower sales and more clicks then before. How else could this be? Click fraud has always been one of those things ad providers like Google, Yahoo, or anyone else involved in PPC sweeps under the rug.

They play it low key, to keep their model and revenue going. After all, why would they want to kill 30% of their existing revenue?

The FBI can detect and locate hackers, why can’t the PPC people do it? They have the resources.

Bringing in revenue for the big corporate giants is the game now. Integrity is gone. Google’s motto was “Do No Harm” but by letting things like this go, they are in fact doing MUCH harm buy standing still. Using the excuse that they didn’t actually do it, doesn’t hold water.

The next generation model that makes sense is the Pay Per Action one. No fraud, and advertisers pay only if they get results. Problem is Google doesn’t want to give up their fat margin PPC system even though it IS better for the customer.

I understand this perfectly, they can’t give up their $16 billion plus ad model to move to a lower revenue PPA system. More revenue keeps them on top, gives them money to stop and crush PPA opponents before they can get off the ground.

Because Google has so much traffic, advertisers continue to use them. As long as Google can keep up the traffic, their PPC model should survive. They even have a Chief Economist for PPC, which shows you how much they need to keep this system alive.

Google knows that PPA is the next natural step, but are trying to prevent it and milk as much mileage out of PPC as they can.

PPA will come, when and form whom, I don’t know, but the way things are going, it has too. It will take a site that has GREAT traffic,  and a PPA model to make them stop and think. But perhaps they just buy them and make sure the ad model is PPC. Was that a Youtube strategy? Google bought  Youtube so Microsoft doesn’t get them into a PPA model?  Maybe, at least part of it.

Anyways, click fraud, over bidding will continue as long as PPC thrives. Unfortunately we have to play the game…at least for now.

Tags: , ,
Posted in Web Site Progress | No Comments »

PPC Problems - Click Fraud

Tuesday, October 14th, 2008

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

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: ,
Posted in Internet Marketing | No Comments »