Friday, May 25, 2007

Click Fraud

Most people think of click fraud as an internet crime in
pay per click advertising caused buy a person, automated
script, or computer program imitates a legitimate user
by clicking on an ad, for the purpose of generating an
expense to the advertiser without having actual interest
in the target of the ad's link. However, there are several
different types of pay per click fraud:
  • competitors clicking on your search ads
  • site owners clicking on ads on their site (content click fraud)
  • your content ads being shown to irrelevant traffic
Competitors Search Click.

Search ads are those ads that are on the search engine
results of Google (or Yahoo) and their respective
search partners (AOL and so on). If there is click
fraud here, you either must accuse Google of the fraud
or your competitors. These are the only ones with motivation.
Even though I don't buy the don't be evil slogan, Google
is making way to much money to risk their entire business on
an incremental dollar. This leaves your competitors...who
may not have either the profitability or slogan of Google.

Competitors have often been accused of clicking on each
others ads to burn through their budgets. If you can force
your competitor to spend his advertising budget on false
traffic (you!) then you spend less getting the
real traffic (clients).

There are several reasons why this is not as prevalent as
you might think. One is , Google will catch the most obvious
click fraud, of one person on one computer (IP address) clicking
the same text adv over and over again. This approach doesn't
work, as it is too easy to recognize multiple clicks from one IP
as being highly unusual and fraudulent.

There are more sophisticated approaches , but they involve
more people...programmers and the more people involved
the more likely to get caught (in spite of conspiracy theorists
need to believe secrets are easy to keep). There is also
a cost of time and effort of programming to make programs
sophisticated enough (to show clicks coming from many different
IPs) to avoid detection that makes the projects less likely.
When you increase the click through rate through fraud you
are by definition creating a higher click through rate for those
ads and that site. This is why they can be caught.

Content click fraud

The more common is the use of programs designed to click
on ads and appear to be from multiple IPs and at natural
times of the day. These programs are used when the
perpetrator owns the sites and earns the revenue directly
from the ads clicked. So if I were to employ such a program
it would click on the ads on this page more than normal
and I would get the check.

In my experience both Google and Yahoo catch many
obvious click frauds and credited our clients accounts quickly.
We monitor our clients ads and traffic to catch the most
blatant abuses of this by noticing unusually high click-thru
rates.

To catch unusual activity for some keywords, the best
defense is an accurate record and knowledge of your
cost per conversion (sale) should be. When you see a large
increase in the number of clicks and no increase in
conversions you know you have a problem. Armed with
this information both search engines are prepared to
analyze and refund your advertising dollars. This is too
important an issue to be ignored and to their credit
they don't.

Irrelevant Content Fraud

The final type of click fraud I am calling fraud, but that may be too
strong, is really irrelevant adv placement. With Google supplying
ads for MySpace you must confirm your product is relevant
to that traffic. Their traffic is so massive that when a Medbanner
clients adv appeared there, the traffic and the adv cost for
that keyword went through the roof.

The service advertised was for a charity that receives car donations
and gives to those in need, this is not relevant for the young crowd
of MySpace.

The problem here is that neither Google nor Yahoo have allowed
the normal connection between the advertiser and the publisher.
The advertiser has only the smallest amount of control over where
his ads show. This is not the norm of the advertising world. This is
starting to change now, but you must make the effort and in some
cases your only choice is to advertise or not advertise.

Click fraud is real and there are a number of companies that have
software and services created to track and monitor this. Finally,
the companies with the most to risk and the greatest amount of
assets to throw at this problem are Google and Yahoo. Although
hackers will continue to think of new ways to game the system,
there is too much at risk for Google to be complacent.

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1 Comments:

Anonymous Boris Mordkovich said...

Robert,

It is an excellent write up on click fraud. I don't know if you've heard, but Fair Isaac (the same company that deals with credit card fraud), recently released some preliminary results of their study where they found click fraud rate to be between 10-15%.

Also, you mentioned that there are some companies out there that can detect and prevent click fraud from taking place. I just wanted to give a few examples of them: AdWatcher (self promotion :)), WhosClickingWho and Clicklab. Hope this helps a bit!

May 31, 2007 10:04 AM  

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