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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.

As employees spend more and more of their workday on the computer, it is crucial to develop and enforce an effective and proper Internet and Computer Usage Policy. There are legitimate reasons for having such a policy and a variety of issues the policy should address.

Personal Internet use costs employers millions of dollars each year in wasted time by employees. To reduce this lost productivity it is important to limit Internet use during working hours to business use only.

Yes, You Need a Policy
Legal liability can arise from inappropriate web browsing, improper posting in forums and on blogs, downloading pirated software, or illegally downloading media files, such as movies and music. Companies can face significant exposure to lawsuits and fines for their employees’ inappropriate actions and an effective policy can help prevent such legal exposure.

Employee Internet use can damage a company’s computer systems and clog their network. A virus entering into a corporate network can have disastrous consequences such as business shutdowns or loss of files. Also, personal use of the Web may use enough bandwidth to seriously slow the network and negatively affect productivity.

Moreover, a company must protect its reputation. Messages published on a message board, chat room or blog using a staff member’s company e-mail can have an effect on the company’s reputation, especially if it contains offensive or inappropriate material.

Developing a Policy
Before implementing a comprehensive Internet and Computer Usage Policy, the company should identify which activities to monitor and manage. Such activity might include web browsing, forum and blog posting, instant messenger use, and down-loading media, software and other associated content while at work or otherwise on the job.

The policy should accurately reflect the company’s procedures in monitoring and managing its employees’ internet and computer use. The policy should stipulate that internet access and other online privileges provided by the company are to be used only for business purposes. The company should state that employees’ use of the Internet and computer system will be monitored for illegal or improper activity. The policy should clearly define what activities are considered improper, and may result in disciplinary action, up to and including termination. The company should state that it may report illegal activities to the appropriate authorities.

Examples of activities to be addressed and/or prohibited in the policy:

• Violating the laws and regulations of the United States or any other nation, or the laws and regulations of any state, city, province or other local jurisdiction;
• Using the company’s system or network to knowingly disable or overload any computer system or network, or to circumvent any system intended to protect the privacy or security of another user;
• Using the company Internet access to commit infractions such as misuse of company assets or resources, sexual harassment, and misappropriation or theft of intellectual property;
• Presenting an employee’s personal opinions as those of the company;
• Browsing websites which contain hateful or obscene content;
• Downloading or distributing pirated software or data;
• Downloading or distributing media files, in violation of copyright or other intellectual property laws; and
• Downloading or installing any software or electronic files without proper authority.

A company may want to include in the policy that the specific websites visited are logged, the frequency and length of time individuals spend viewing websites will be logged, and that if instant messenger use is allowed for business purposes IM’s sent and/or received can be logged and viewed. The policy should also stipulate which employees are to be covered by the policy.

Making it Work
The policy should become part of the company’s employee manual and should be distributed to all employees. If possible, the company should ask all employees sign off on receipt of the policy (or the manual) prior to getting access to company computers or email accounts. By signing, employees are confirming that they are aware of company policies, restrictions and limitations.

Internet and computer misuse and abuse have become too prevalent for companies to overlook. As employees’ daily routines evolve, businesses must be willing to adapt. Developing and enforcing a comprehensive Internet and Computer Usage Policy is a crucial component for business evolution.