Click Fraud 101

Pay per click search advertising is incredibly popular these days. Any advertiser can choose a handful of keywords they want to be found under, open a Google Adwords or Yahoo Search Marketing account, and start running ads within a few minutes to a couple of days.

Pay per click is a simple concept. Advertisers tell Google and Yahoo how much they are willing to pay each time someone clicks on their ads. And based on how many other advertisers are bidding on those same keywords, Google and Yahoo calculate how high up in the search results you’ll appear.

With all the advantages of pay per click advertising, there is a dark side: click fraud.

How Click Fraud Occurs
In my experience, click fraud occurs in a few main forms.

1) Participating in Google/Yahoo’s Context Advertising Network. Google and Yahoo both partner with publishers to run ads on their websites. Publishers then make a few cents every time someone clicks on an ad that is displayed on their website. This can be abused if that publisher’s visitors click on your ad to help generate revenue for the sites or because they don’t realize they’re clicking on an ad, rather than because they are interested in your services.

2) Spam sites targeting words with high costs per click. I see this a lot because many of my clients are in the legal industry and lawyers are notorious for bidding high on keywords related to ‘personal injury’ and other highly profitable cases. Here, sites set up what look like directories of lawyers. Problem is, all listings are actually pay per click ads and every time you click on a lawyer’s listing, that spam site gets money. Any industry where people pay big bucks per click is susceptible to this kind of click fraud.

3) Get rich quick niche sites Similar to #2, these sites are set up for the only purpose of generating money. The sites scan the web searching for free articles to use on their sites or pay a couple of bucks a month to writers that write articles focused around a particular niche. (see WSJ article by Lee Gomes)

4) Competitors click on your ads. If you’re a small advertiser, chances are that you don’t have a huge search marketing budget. You’ve probably set a daily or monthly limit on how much you’re willing to spend. Competitors may use this to their advantage by clicking on your ads and using up your budget. Once you’ve reached your limit, your ads will stop running.

How To Stop Click Fraud
I wish I knew the answer to this but there doesn’t seem to be a simple solution. Many cases of click fraud are detected with Google and Yahoo’s algorithms or independent audit sites. Often, they’ll weed out fraud clicks and never charge you. Last month, for instance, one of my client’s website stats reported a number of clicks that had been screened by ValidClick.com.

But they don’t get all of them. There were also a handful of clicks from sites in category #2. The best thing you can do is report suspicious clicks to Google.

Recently, Google settled a class action suit brought in an Arkansas state court by agreeing to pay up to $90M to advertisers. If you believe you may have experienced click fraud, you can contact the prosecutors through their website, LostClicks.com

Web Resources
Google’s FAQ on Invalid Clicks
Google’s Inside AdWords FAQ on Invalid Clicks
LostClicks.com
Click Fraud: An Industry Crisis?

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