A Guide To Spotting Clíck Fraud

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Clíck Fraud: A Guide To
Protecting Your Pay-Per-Click Campaign
By John Hill

Clíck fraud is the latest 'hot topic' circulating the online marketing arena, but what is it? And how does it affect you as a merchant running a pay-per-clíck campaign?

Spending on Internet advertising is growing faster than any other sector of the advertising industry and is expected to surge from $12.5 billion last year to $29 billion by 2010 in the U.S. alone, according to the researcher eMarketer Inc., with around 50% of this spending being spent on pay-per-clíck (PPC) advertising.

Here we offër you a complete guide as to what this phenomenon is, who is likely to commit such an act, how to identify & prevent clíck fraud and how to best report instances of suspected clíck fraud on your PPC campaign.

What is Clíck Fraud?

According to Wikipedia "Clíck fraud is a type of internet crime that occurs in pay per clíck online advertising when a person, automated scrípt, or computer program imitates a legitímate user of a web browser clicking on an ad, for the purpose of generating a charge per clíck without having actual interest in the target of the ad's link"

Clíck Fraud is estimated to range from 5% - 15% of pay-per-clíck traffíc (some estimates are as high as 20% - 35%) although Google estimates clíck fraud at only 2% due to the rigorous detection methods they claim are in place.

In a recent study by Clíck Forensics, clíck fraud reached a new high of 14.2% in the last quarter of 2006 with the average rate of clíck fraud on 'content networks' as high as 19.2% for the same quarter.

So Who is Likely To Commit Clíck Fraud?

The clíck fraud villain is most likely to fall into one of three categories:

1. Online vandals with nothing better to do than cause a nuisance.

2. A competitor clicking on your search network PPC ads, with the sole intention of increasing your cost-per-acquisition (CPA). This could be interpreted as clíck fraud, although currently the search engines do not consider this kind of activity as clíck fraud.

3. Search Engine advertising affiliates who generate self-income from fraudulent clicks on 'content network' adverts displayed on their own websites. This practice, at its extreme, involves the use of unscrupulous 'paid to read' or PTR sites, which are basically clíck-fraud rings, some with hundreds or thousands of participants, paid to clíck on your ads with no regard for your return on ínvestment (ROI) as the advertiser.

What are the Search Engines Doing About It?

Both Google and Yahoo claim that they filter out most fraudulent clicks. The costs involved for these clicks are either not charged or are reimbursed to advertisers who have been wrongly billed.

To combat clíck fraud Google applies four layers of fraud detection:

1. Automatic detection - this filters clicks from both the search and content networks in real-time with the goal of removing them before their existence is ever shown to the advertiser.

2. The "Flagging system" - an automatic process to remove invalid AdSense clicks.

3. The "Manual review" - this process has more than two-dozen Google employees tasked with manually reviewing and removing any suspicious AdSense clicks.

4. If the first three layers of protection fail then the fourth and final layer of clíck fraud detection falls to the advertiser and 3rd party clíck fraud detection companies. Google refers to this layer as "requested investigations".

Google's main aim is that the first three layers of filtering will identify all invalid and fraudulent clicks. These layers currently filter more than 98% of invalid clicks.

And should you be in any doubt, both Google and Yahoo have, in the past, released the following statements:

"We think clíck fraud is a serious but manageable issue" says John Slade, Yahoo's senior director for global product management.

"Google strives to detect every invalid clíck that passes through its system" says Shuman Ghosemajumder, the Google manager for trust and safety. "It's absolutely in our best interest for advertisers to have confidence in this industry."

As a positive for the future, Google is currently testing a cost-per-action (CPA) platform, which should effectively deal with clíck fraud. With CPA ads you don't pay by the clíck but instead pay when the customer reaches a certain goal: buys a product, fills an enquiry, etc.

How to Identify Clíck Fraud on Your Pay-Per-Clíck Campaign

Before you can even contemplate identifying clíck fraud you must have effective tracking tools implemented on your website and, if possible, access to your server logs. With tracking tools in place, the most obvious way of spotting clíck fraud is to simply observe any spikes in traffíc where there is no particular shift in your conversions.

Once identified, these spikes can then be analysed by looking for repeated clicks from sources that look similar. This similarity could be an IP address or an IP range; it could be a combination of IP ranges; browser version; operating system. Basically look for data in groups that looks fraudulent.

If all this is just 'a bit too heavy' for you then there are a number of companies out there that can help.

AdWatcher: claims to be able to spot clíck fraud so that you can report it. Covers other aspects of PPC marketing, by helping you track your ROI, email success, etc.

Clíck Auditor: offers the ability to see whether your competitor's IP is the one performing any abusive clicking, and says it will stealthily gather your competitors IP addresses for this purpose.

ClickSentinel: focuses on helping you get refunds on fraudulent clicks, as requesting a refund from your PPC provider can often be very difficult for the un-initiated.

Clíck Tracks: reportedly has automatic clíck fraud reporting along with other clíck tracking (analytics) tools.

Reporting Suspected Clíck Fraud

When reporting suspected clíck fraud, you must include as much captured data as possible to íncrease your likelihood of obtaining a refund or credít.

The following guidelines are recommended:

Clearly state, at the very beginning of your claim, that you are reporting suspected clíck fraud.

Provide a full explanation to support your claim.

Include your account details (do not include your password or payment information).

State the exact keyword, ad and campaign where you suspect clíck fraud has occurred.

State the exact time, date and IP address of each instance of suspected clíck fraud. This data can be gleaned from your server logs or 3rd party tracking tool.

Finally, state whether you are requesting a refund, credít or investigation.
If you were using any software tools, such as those highlighted earlier, to help you track and report clíck fraud, then include any reports generated by these in your claim.

Lowering the Risk of Clíck Fraud Happening to You!

Always bear in mind that your PPC objective is to get conversions and not just clicks.

The more you have researched the demographics of your intended client base the better your chance of avoiding clíck fraud. Are your clients from a specific country or location? When are they likely to search for your product or service? What are the key search-terms they are using?

With demographic data in-hand you can target your ad campaigns more effectively and lower your risk of clíck fraud.

About The Author
E-Gain New Media are a specialist UK SEO company specialising in UK Search Engine Optimization, Online PR and Pay-Per-Click Management.

[Energyhelpline]

I have just been hit by a very elaborate fraud scam via an affiliate network that I was luckily able to pick up 4 days in. Basically the affiliate was using real data (name, address, phone number, DOB) to create false applications. It was only when they got greedy after 3-4 days and started creating dozens of applications a day that I got suspicious.

What I would like to know is if other merchants out there have been hit in a similar way recently and if there is a forum list of named and shamed sites.

I certainly have a few to add if such a site does exist

[Christoph]

Is it just me or is click-fraud not a "hot-topic"? I'd heard of this ages ago!

[mikey_freedom]

With you Chris. 'Hot topic' I guess at a stretch as it still affects people. 'Latest' - err not by a long shot - see the Click Defense class action two years ago and just about every online marketing forum out there during 2005-6. I'm just bored keep seeing new threads which turn out to be rehashed ezine articles, with nothing new added. As for "According to Wikipedia" - come on - according to Wikpedia the world is made of chocolate or other such nonsense.

[10k]

energy helpline - you'll see this alot, in any business there will be people trying to con you which gives all affiliates a bad name. You just need to keep your eye on the ball, if something doesn't look quite right it probably isn't - there are lots of ways they may do this, false applications is one, cookie stuffing/forced clicks etc, the list goes on. For most merchants this means working closely with the network, checking every affiliate sale/lead, referring site etc. It can be a pain but has to be done. The vast vast majority of affiliates are above board and honest but there will always be a few willing to break the rules for a quick buck. I assume the affiliate in question was banned from the network?

[10k]

With you on that Mikey

banner-traffic - if you've spotted an interesting article on the web that you think people may want to read, maybe you could just post a link to the article instead of the full text?