Back2Basics: Does Click Fraud Still Matter? Part 1

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Many pay-per-click advertisers don’t outwardly worry a great deal about click fraud these days, trusting instead in the barriers and detection algorithms that search engines have developed. It wasn’t that long ago, however, that detecting and preventing click fraud was top of mind of all advertisers, as fraudsters enlisted armies of clickers in third-world countries to run through the pay-per-click budgets of online advertisers. Webmasters wondered if their competitors were paying people on the other side of the world to click on pay-per-click advertisements with no intent of purchasing an item or indeed any interest at all in the product or service.

Although click fraud may have moved off the front page list of concerns of many online advertisers, it is far from non-existent. In fact, although search engines have been quite successful in tackling fraudulent click assaults on the PPC ads of an individual business, the complexity and scope of click fraud has expanded to global proportions. Earlier in November 2011, news broke about the arrest of a number of individuals involved in a gigantic fraud and malware scheme, part of which included the creation of ad networks for the express purpose of facilitating click fraud through redirected clicks. With millions of user computers infected with malware and up to $14 million in fraudulent advertising revenue, this is far from the typical click fraud scenario of a few extra clicks on an AdWords ad that advertisers used to worry about.

But the extent of the fraud is indeed widespread. Adometry (formerly Click Forensics) has been reporting statistics on the percentage of click fraud in the industry for a number of years, first concentrating on pay-per-click and now expanding to include fraud in the display advertising arena. The overall click fraud rate has been inching higher almost every quarter, now hovering around 20% (19.1% in Q4 of 2010 for example).

As the means of identifying this type of fraud have become easier, many webmasters count on the search engines to catch any and all types of click fraud. Google looks at every click made on an ad, analyzing each for a variety of warning signs and characteristics that might indicate it is fraudulent in nature. Clicks deemed fraudulent are not charged for, nor are they included in traffic and other statistics provided to the advertiser.

However, if the advertiser wishes to see how many fraudulent clicks were detected and what percentage they comprise of the total clicks made on the campaign, those figures are available in the Performance section of the campaign’s activity reports. However, although search engines certainly have become very proficient at identifying the hallmarks of fraudulent click activity and catching the perpetrators of many schemes, webmasters still need to keep an eye out for suspicious clicks and report any activity that looks out of the ordinary if we have any hope of keeping a lid on this illegal activity.

How does one go about this? What is suspicious activity and what is just normal? By spending a little time each week or so going through the statistics around the clicks that have taken place on your pay-per-click ads, you can begin to understand how the search engines identify click fraud and learn how to see its hallmarks.

In Part 2 of this article, we’ll look at some points to keep top of mind as you work to understand how click fraud may be involved in your pay-per-click advertising campaigns so you can minimize its effect.

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  1. Yes, it still matters..