Pay Per Click Growth Boosts Fraud Awareness
Since the first pay per click (PPC) ads showed up some 10 years ago, click fraud has been an unchallenged issue for CMOs. As executive level marketers continue expanding their use of PPC media, more consider battling click fraud a priority. In fact, search engine marketing providers and other media buying agencies increasingly address the issue for clients instead of trying to brush it aside.
Click fraud’s impact can be substantial for advertisers both large and small. Small advertisers often lack the resources to diagnose and correct for click fraud. Marketers with significant PPC budgets, on the other hand, risk incurring substantial losses even if they limit click fraud to one or two percent of PPC spend. Through the ValidClick Ad Exchange, we’ve seen non-trivial suspicious publisher click rates from even the most high quality, tier one sites, sometimes indicating that as much as 10% of the clicks from a particular publisher may have been fraudulent.
Publisher inaction also motivates marketers. Google CEO Eric Schmidt once cited a “perfect economic solution” to click fraud: “Let it happen.”
While it’s tempting to think that “the market” ultimately takes care of the click fraud problem, relying on market forces ultimately still rewards bad publishers. The presence of click fraud creates the illusion that a keyword performs ineffectively, when, in fact, it may actually be effectively driving quality traffic for an advertiser.
Over time, an average media buyer detects these signs of ineffectiveness and eliminates the keyword from a portfolio or at least significantly reduces the bid price. This idea of market self correction for click fraud is short sighted on many fronts. Beyond requiring marketers to pay for invalid clicks, it also minimizes the many faces of click fraud at work today.
Most think click fraud originates from a competitor or publisher clicking on a banner or text ad to falsely increase clicks to inflate publisher revenue or manipulate competitive advertising by decreasing ROI or depleting budgets. On a larger scale, though, fraudsters create automated programs or employ real people to click on PPC ads and cause significant damage. The people that do the clicking often receive points, money or rewards and usually do not understand the effect of their actions.
Automated clicking programs or clickbots take it a step further by generating fraudulent clicks that appear legitimate to many click fraud auditing technologies. They can be downloaded from the Internet and often get installed on a user’s computer unbeknownst to them.
Although the major search engines control huge percentages of marketers’ online spend and have substantial click fraud problems in their own right, they represent only the tip of the click fraud iceberg. Other breeding grounds for click fraud include syndicated search ads, Google’s AdSense, and other third party ad networks and PPC media. Perhaps the most alarming concern for marketers today, ad networks continue to gain steam and grow in share of PPC spend.
Concerned CMOs should:
- Understand how large a role PPC advertising plays in their team’s overall effort
- Ensure their teams are aware of click fraud
- Safeguard PPC ad programs with click fraud protection
- Partner with PPC networks that hold publishers accountable
Stan Antonuk is CEO of Kowabunga.
