For the newbie, pay-per-click (PPC) advertising is exactly what the name suggests. Only when somebody clicks on your ad are you charged. This is fine and dandy if the person clicking on the ad is a real consumer who's really interested in what you're selling. But today it's quite possible that they're not really people their computer programs clicking away running up your bill.
Let me give you an example: I'm your competitor, I'm absolutely furious that you keep on outbidding me on the pay-per-click top position. I know whenever someone clicks on your ad it costs you. So I start clicking away and eventually burn through your cash. It's only a matter of time before I push you out of that top position. Or if I'm really lazy I can just higher a click house in India, Egypt or China who specialize in such dirty deeds. For asmall nominal fee they will put dozens of people clicking away on your ads every day.
If I really wanna get sophisticated, I could use a program to do the clicking. There's bot programs that will mimic human behavior on your website. Looking like they're going through the purchasing process and at the last moment changing their mind and abandoning the shopping cart. Now you've just lost money on a fake click and most likely this took place on an affiliates website who had your paid ad on his site and is profiting from it as well. Which opens up all kinds of double-crossing possibilities.
In the past there's been people on both sides of this debate, with some saying it doesn't exist and otherssaying it's even bigger than we suspect. In a recent webinar sponsored by Marketing Experiments, the question of "What can a marketer do about click fraud?" was the main topic. An independent study conducted by Marketing Experiments found that as much as 30 percent of PPC clicks are fraudulent. I wonder if perhaps this study had some bearing on Google's recent class action click fraud settlement to the tune of $90M.
Now, if someone would use the tactics I suggested above how would you go about catching them:? My suggestion, you monitor. Maybe a little more monitoring would be good. Oh hell while you're at it monitor some more. You might be surprised to find you have 1500 clicks originating from China and curiously not one sale. Also for some reason they like visiting between nine and five. And then it hits you -- you develop a sneaking suspicion that these may not be real.
OK, now take those stats to your friendly search engine representative and plead your case.
Good luck with that! Of course they agreed to look into it. But I'll bet you if you're like most they'll find there was no fraud. And since it's a major search engine what are you going to do. They've already got your money. However with enough information you may be able to prove you been ripped off and get your money back. But I wouldn't count on it. Get a hold of a very good web analytics program, or better yet, some click fraud detection software.
The reality is you need to be more proactive. A few of the better proactive things you can do, as pointed out at Marketing Experiments webinar:
Be very conservative with content-targeted ads placed on third-party websites. This is where the majority of international fraud takes place.
If fraudulent or unproductive activity occurs primarily during a certain time of the day, then pause the campaigns for those hours.
Don't buy PPC traffic on unknown search engines. These will often allow bots and other suspicious activity in without a high level of click fraud filtering.
In addition to monitoring paid conversions, you should also monitor your organic conversion rates. A sudden deviation in the ratio between these two conversion rates may indicate click fraud.
High-traffic, expensive keywords are the most obvious targets for those involved in creating fraudulent clicks. Make their job harder by leveraging keywords that aren't so inflated.
Pay-Per-Click (PPC) For the newbie
