Click Fraud: Three Important Considerations

By Jul 28, 2006

Cam BalzerChief marketers hear a lot about click fraud in search. Just last week, Google announced a new AdWords feature that provides expanded information on invalid click activity affecting an advertiser’s account. With so much recent focus on marketing accountability, this is clearly an important and timely issue. Chief marketing officers want accountability for each marketing dollar spent, and many wonder if they should scale back their search investment due to click fraud.

In response to click fraud, you should use the following three tactics to ensure continued long-term and short-term value from your search programs:

1) Hold the search engines accountable.
The engines must maintain reasonable standards and appropriate disclosure to paying customers. The definition of fraudulent clicks is open at this point. Are they clicks with clearly malicious intent? Or does the term encompass any click without a direct purchase intent? Many of the current analyses ignore the fact that the engines routinely filter invalid clicks in real-time, with those clicks never appearing on a marketer’s invoice.

Nevertheless, large advertisers in particular should insist on accountability and translucence (because the engines need to maintain some degree of secrecy about their techniques, full transparency is out of the question). Some smaller advertisers have taken matters into their own hands and pursued legal recourse. Thanks in part to class-action lawsuits, the industry now has an independent assessment of Google’s “reasonable efforts” to prevent click fraud. Marketers should lobby the engines to take the next step and standardize definitions, shared terminology, and common remediation processes in this matter.

2) View search in the context of all other marketing channels.
Breakage, loosely defined as the difference between a media outlet’s stated audience numbers and a smaller subset of that audience, happens in all marketing channels. How many people actually watched or listened to the advertisement? How many left the room, changed the station, or muted the advertisement? Among those exposed to the advertisement, how many were actually in the promised demographic?

When an ad buy of any kind fails to deliver the anticipated value, advertisers commonly renegotiate or pursue other options. You should manage risk responsibly and understand that varying standards of quality and integrity exist across different advertising channels and industries. By knowing the pros and cons, you can better weigh the risks of each channel and make more-informed decisions about which ones to tap.

3) Hold the search team accountable.
Few channels provide the accountability search offers. The very features that make it susceptible to click fraud also make it possible for advertisers to make data-based adjustments on the fly to achieve optimal results. So you can not only control costs and results; you can also continually shape and modify the way your brands interact with consumers through search.

Two considerations can help you keep your agencies and yourself on track:

a. Ensure that paid-search efforts use industrial-grade tracking and industry-leading analytic and bid-management tools. With tools in place, incidental invalid clicks should not adversely affect the quality of a pay-per-click program, and massive click fraud will be obvious.

b. Understand the difference between invalid clicks and click fraud. Click fraud usually entails massive, intentional abuse of the system. Invalid clicks frequently happen at a low level across entire campaigns when users click multiple times on links or click without the intention of buying. Most cost-per-click programs can absorb invalid clicks within their ROI parameters, while click fraud should be brought to the attention of the engines.

These measures provide search marketers with the data needed to optimize their search programs and ensure ongoing improvements, providing a gauge against which the performance of all keywords can be compared. Analytics provide clarification as to why a keyword performs as it does, looking at such issues as consumer navigation paths. Bid management tools allow you to scale and efficiently act on lessons learned through tracking and analytics.

Be aggressive but realistic
You also need to consistently take stock to ensure that you are framing your search programs aggressively yet realistically. All goals should be aggressive yet attainable, and metrics should measure actual progress against goals. Marketers with a holistic view of search’s value will more likely achieve the ideal blend of volume and effectiveness by balancing sales and leads against maintaining a desirable ROI.

The long-term growth opportunity for search marketing programs depends largely upon the engines’ maintaining the quality and integrity of their keyword marketplaces. Marketers should monitor data with an eye to obviously unproductive clicks and another to the overall ROI of campaigns. By using established best practices and responsible marketing partners, you can achieve this optimal blend of volume and efficiency and avoid the pitfalls of click fraud.

Cam Balzer is director of search strategy for Performics, the Chicago-based performance-based marketing division of DoubleClick, and a monthly contributor to CHIEF MARKETER. Contact him at cbalzer@performics.com.