Click Fraud and the Small Business Concern

Many businesses, large and small, engage in product promotion on Google, Yahoo! and MSN. Pay-per-click (PPC) is a way organizations can buy face-time with those in their target markets. For some industries and with certain keywords, this can be expensive.

Ideally, having an optimized Web site for natural searchers is optimal, but sometimes difficult and costly. So many companies will spend a great deal of their marketing budgets on Internet promotion. They will create an ‘ad word’ campaign, limiting themselves to some daily budget. That budget might be $25 a day or $25000 a day.

For each keyword or range of keywords an end user enter into a search engine, a certain number of sponsored links will be returned, along with the natural search results. Those bidding the highest will achieve the most prominent positions on the search results page. The end user has the option of clicking any of those resulting items, based on their relativism to their inquiry. If the user clicks on one of the sponsored links, that single click will cost the owner of that site a certain amount of money — whatever the bid was for that word and position. (It pays for it by having a credit card or some payment means with the search engine supplier.) Based on the number of searches for that range of keywords, the firm running the PPC will often reach their daily budget. Once the budget is gone, there will be no more searches returned for that range of keywords or that campaign until the 24-hour clock resets.

A problem confront those engaged in PPC is that someone with ’bad intent’ can click on a competitor’s PPC ad with the explicit purpose of spending its competitors PPC budget. The result wastes its competitor’s money and can give the competitor a high page position, often without spending as much money as its competitor. There is little the PPC campaign owner can do. In fact, it takes careful analysis by the marketing manager to even suspect foul-play. It is a problem that only the search engine provider can address.

Recently, the Interactive Advertising Bureau has published guidelines for determining when fraudsters are taking advantage of pay-per-click (PPC) advertisements. The Click Measurement Guidelines (the 27-page PDF Guidelines document can be downloaded <HERE>, summarized as follows:

• Define the technical life-cycle of a “click” and outline standard methodologies by which clicks should be measured and counted, including provisions for identifying invalid and/or fraudulent clicks.
• Establish standard terms that will help streamline the buying and selling of click-based media. 
• Increase transparency and consistency in click measurements for media companies, ad-serving organizations, advertisers, and third-party click auditors.

Estimates of fraudulent click range from below 10 percent to as high as 17 percent. Regardless, as one who has and does run PPC campaigns, seeing the advertising industry and the search engine providers making attempts to address this is welcomed. With the amount of money we are talking, it is critical for building credibility for this form of advertising.

This entry was posted on 13 May 2009 at 16:40 and is filed under Web Security. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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