Much Ado About Click Fraud?
Fraudulent clicks can kill a search engine marketing program. Costs can skyrocket, and for the on-line retailer, revenue goes nowhere. Most of my clients worry about it, and it’s tough to impossible to get a complete understanding of the size or scope of the actual problem. In part to protect their ability to stop click fraud, the search providers release few details on the extent of the problem and specifically how they combat it. The search engines say the problem is minimal, and that they have sophisticated tools for detecting and eliminating click fraud. But along comes Click Forensics, a company that provides click fraud detection tools and services, and they claim the problem is getting worse.
Now, before I go any further, let’s get all our cards on the table and make sure we understand everyone’s motivations. Click Forensics provides click fraud tools and services, so they obviously believe click fraud is a big problem, and have an interest in proving it. On the other side of the coin are the search engines, Google, Yahoo, MSN, and Ask, who make money from the clicks, but risk losing advertisers if the problem is perceived to be large. It can also be a big headache for them to manually review click fraud claims and issue refunds, and they also put a lot of resources into algorithmically eliminating click fraud as well. My motivations are somewhere in the middle: I manage paid search campaigns for ChannelAdvisor clients so if click fraud hurts their businesses, it hurts me too. If click fraud is not a problem, I’ll focus my search marketing energies elsewhere.
For our purposes here, let’s define a fraudulent click as a click on a company’s paid search ad with the sole purpose of either driving up their cost or somehow getting paid for the click. For searches done on the actual search engines, the “search network”, the incentives to cheat aren’t that high. There is no way for the person clicking to get paid; the main thing is just to run up a competitor’s bill. Google and others are good at detecting these clicks and generally eliminate them from the search marketer’s bill. Most legitimate companies aren’t going to spend much time creating bots, or outsourcing just to hurt their competition a little bit. It could quickly escalate to the point where no one benefits.
However, on the content network there IS incentive to cheat. The content networks are all the sites that display ads and get paid when those ads are clicked on. Google’s AdSense program is a content network, and my blog has AdSense ads. If someone visits my website (it happened just last month), and clicks on one of the ads, I get paid by Google. That’s where fraud can come into play. Website publishers will click on the ads on their website to increase the amount they get paid. Not surprisingly, the content network is also where Click Forensics sees the highest fraud rate. According to Click Forensics:
The rate of click fraud in on-line pay-per-click advertising hit 16.2% in the third quarter, up 17.4% from 13.8% a year earlier and the highest level this year, according to the quarterly Click Fraud Index. The click fraud rate for affiliate sites was 28.1%, up from 19.4% at year-end 2006, when the index first began tracking affiliate click fraud activity.
The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, also has risen steadily in 2007, reaching 21.9% in the first quarter and 25.6% in the second quarter.
Over 60% of traffic from parked domains and made-for-ad sites was click fraud, according to the index. A parked domain is an inactive domain reserved for later use or one that points to another existing domain.
The search providers have been putting a lot of resources into improving the content network both by eliminating aggregation sites and detecting fraudulent clicks. For the search marketer, you can opt out of displaying your ads on specific sites as well.
At the end of the day, the content network is just another outlet for paid search marketing. It needs to prove itself just as the search network does. Some of my clients have had success with the content network, and as the providers improve their detection tools, we will periodically do additional testing. The content network can be useful to grow additional revenue once the search networks are running smoothly or to help build your brand. If you choose to experiment with the content network, create separate campaigns and monitor them separately. Identify the sites that are converting and focus your campaigns on them. Despite the fraud, it is possible to make money on the content networks. But because of the potential of fraud, you need to be careful.