EBizInsider

As pay-per-click (PPC) advertising becomes more and more popular with online advertisers, e-commerce operators must be increasingly wary of the latest scams and most recent forms of fraud. Pay-Per-Click online advertising has grown into a multi-billion dollar business and the stakes and downside risks have never been greater. One online development that advertisers need to be acutely aware of is that of “click fraud.”

Click fraud is the clicking on an online advertisement for reasons other than the good faith intention to purchase the associated goods or services or to obtain information. This fraud can be perpetrated by competitors or unscrupulous marketers and it can cost an advertiser countless sums of money in wasted advertising dollars.

Why Click Fraud?

There are several motivations for click fraud. One is to make an advertising campaign appear more effective. For example, a marketing company, seeking to generate unjustified revenue, might arrange to have advertisements it has developed for a client clicked by those who are not potential customers in an effort to improperly inflate the results and make their marketing seem more effective than it really is. Another motivation is to force a competitor to pay for worthless clicks. For instance, someone can repeatedly click on a competitor’s ad without buying. This makes the competitor waste money for no results, leading them to assume their conversions are not worth the investment, which in turn can cause them to bid less aggressively or lower their overall advertising budget. If it works, this has the effect of lowering the cost of that advertising. There are a number of other methods and motives for perpetuating click fraud and new scams are being discovered daily.

How Click Fraud Works

There are several ways to actually generate the amount of clicks necessary to effectuate click fraud. Two of the most prevalent are to either manually click on advertisements themselves or to use automated software programs designed to continuously click on PPC advertisements. In other words, someone can sit on the computer all day and do nothing but click ads (or pay someone to do so), or they can implement software to automatically click those ads over and over again. These methods can result in thousands upon thousands of fraudulent clicks.

Detecting Click Fraud

Since it is almost impossible to know the true intentions of someone surfing the Web, detecting and proving click fraud can be very difficult. No matter what methods of detection you employ, no process is infallible. Both Yahoo! and Google have methods to detect and prevent click fraud. These systems are constantly evolving and both keep the details relatively secret for security purposes. They both utilize a variety of click monitoring techniques and have people examine click activity and investigate cases where click fraud is suspected. If click fraud is found they will then take action. A number of other companies are developing their own solutions for identifying fraudulent clicks and dealing with click fraud. There are managed solutions as well as software applications and other online resources available to help advertisers deal with this problem.

Pay Attention!

Also, proper management of PPC campaigns is critically important. Advertisers who monitor their own PPC campaigns should review the related records, reports and logs to identify unusual activity. They should pay attention to discrepancies between the number of clicks they pay for and their anticipated conversions. If an advertiser works with a third party who is responsible for managing the advertiser’s PPC campaigns, they should make sure that the company is qualified, capable and honest.

By monitoring responsibly, an advertiser can quickly become aware of invalid clicks and take steps to stop and prevent click fraud. Ultimately, there is no foolproof method to detect or prevent this problem. There will be more internet scams and scammers tomorrow than there are today. However, advertisers can mitigate their damages by staying educated and informed, remaining attentive, and being quick to act when a problem is discovered. If an advertiser is willing to spend money on advertising, he or she should also spend the time and money necessary to protect that investment.

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