Click Fraud

With click fraud rates nearing 30% of all clickthroughs, every PPC advertiser needs to know how to protect themselves. This article demystifies click fraud, the ways to recover lost funds if you've been a victim, and how avoid it altogether.

With the rate of click fraud on an upswing, what can you do to protect yourself?

Definition

Click Fraud is an increasingly common occurrence in pay-per-click advertising. It happens when a human, computer program, or script generates clickthroughs with the sole intention of generating a charge. Not only do fraudulent clickthroughs skew data and decrease the accuracy of ROI reports, but they cost companies money.

The Types

Click fraud is an illegal, unethical practice. It has three primary forms: minor, major, and impression.

Minor click fraud occurs on a small scale. It is exemplified by an individual building a small business, then publishing and clicking on their own ads to create the illusion of profits.
Major click fraud takes place on a large scale. It takes the form of computer-based scripts which act like humans clicking on ads. This method is quick to generate suspicion, as the majority of the clicks tend to come from one source.
Impression click fraud occurs when fraudsters deliberately disable keywords. This is typically done to industry competitors; the advertisers face penalties for low click through rates. The main advantage – or disadvantage – is that competitor’s lower-bid keywords will receive top rank, overtaking the previously high-bid keywords of the market leaders.

Action

Many companies have turned to litigation in order to reclaim lost funds. While the lawsuits against potential click fraudsters have been numerous, they can be difficult to pursue; it is hard to determine and prove who is orchestrating and participating in click fraud plots.

Companies are being created solely to fight click fraud. Some utilize specific tracking software, while others offer in-depth analysis of site and advertising actions, and record suspicious activity. Companies such as ClickDetective, Who'sClickingWho, and ClickDefense are just a few of this new type of business. Their methods of catching click fraudsters include: reviewing IP addresses and search engine records. Once patterns have been determined, it is easier to route out the sources of fraudulent clicks.

There have been a number of software tools created to target click fraud as well. These tools employ features such as IP alerts, which inform you when a single user is clicking multiple times.

The best action an independent company can take in the fight against click fraud is to utilize conversion tracking services – such as Conversion Ruler – in combination with those provided by search engines. Tracking your conversion rate enables you to determine the overall success and effectiveness of your online advertising campaigns. These tools will also let you to know every IP address that clicks through to your site, where they came from and where they went prior to and after viewing your web site.Assertiveness is the best weapon against click fraudsters.

Some supporters of the PPC system feel that changes are necessary in order to successfully combat click fraud. The proposed system is called cost-per-action, and while it works in much the same manor as standard PPC, there is one primary difference. PPC is susceptible to click fraud precisely because users can click on one ad numerous times, and have the advertiser charged. CPA works a little differently, in that advertisers are only charged when a user clicks on their ad and purchases something from their site. While the larger search engines are hesitant to alter their very profitable PPC business plan, there are some who have adopted the new model with great success. Snap.com is one such search engine offering CPA service.

Search Engines

Many PPC advertisers feel that the burden of responsibility in the fight against click fraud sits with the search engines themselves. Because search engines profit from the number of clicks each ad receives, it is easy to see why they are not enforcing a no-click-fraud policy as strictly as advertisers would like.

Search engines disagree, insisting that they are doing whatever it takes to stop click fraud. Their primary methods include:

Offering advertisers a choice in where their ads will appear (a more limited area will limit click fraud).
Monitoring clicks and alerting users who click multiple times on the same ads.
Issuing refunds to advertisers who have experienced click fraud through their search engines.

One of the main reasons why these methods are proving ineffective comes from the fact that click fraudsters are aware of how search engines track fraudulent activity, and are creating newer, more devious ways around their tracking methods. Search engines will offer refunds to advertisers who are able to prove that they have been the victim of click fraud. Having support data from a third party not only helps your case, but usually results in a refund.

Fighting Back

The best defense in fighting click fraud is a good offense. Be aware of the problem and do what it takes to ensure that you will not be a victim. Monitoring your sites against click fraud independently and with a third party remains the strongest route to take.

Companies designed specifically to track fraudulent activity employ a number of tools that you can use to your advantage, including permission to view data from multiple search engines at once, in order to determine whether the same user is clicking on your ads across the board. Who’sClickingWho.com is one such company that tracks fraudulent activity and takes measures to stop it. They issue an alert directly to the fraudster after a suspicious level of clicks has been reached; this is typically an effective defensive measure. The primary combat strategies for fighting click fraud include:

Tracking and investigating drops in web site conversion.
Utilizing a click fraud tracking tool or company.
Reporting any suspicious activity to your search engines.
Monitoring visitors to your site. This will enable you to determine user trends and catch any fraudulent activity.

Conclusion

When it comes to click fraud, be smart and be careful. Fraud rates are rising steadily and currently comprise nearly 30% of all clicks. Click fraud not only costs you money, but it can also affect your reputation and brand credibility. Do what it takes to decrease your risk.

Advertise with a cost-per-action search engine.
Have limited ad visibility on the major search engines.
Employ conversion tracking tools.
Use a third party company to help track fraudulent activity.

If you have the slightest suspicion that you are or have been the victim of click fraud, contact your search engines and do something about it. Click fraud may happen to you, but that does not mean that you have to be a victim.

To contact us, use our help desk.

MarketRuler