When Click Fraud Attacks! Is the Threat Real Enough to Fight Back?
Is click fraud a substantial problem? With the recent $90 million Google settlement, the interactive marketing community can hardly say it doesn’t exist. But the real issue is just how much of a problem is click fraud. When you talk to most industry experts, they say that this settlement is off by at least a factor of 10. Based on Google’s sales for the last four years, this represents 1 percent of sales, while most experts agree that fraud averages 10 to 15 percent of sales and even higher in more competitive industries.
Recently, Marketing Experiments, a well-respected marking research firm, did three separate tests and found that fraud was 29.5, 9.8, and 8.3 percent in each of the experiments. Surveying advertisers, in the same study, showed that 25 percent saw the problem as a moderate to significant concern. The click fraud tracking site Click Fraud Index has the percentage ranging from 17% for first-tier search engines and as high as 30% for third-tier engines.
What Click Fraud Is Not
In fairness to search engines, click fraud is not necessarily related to unintentional clicks. These are clicks that are made by users where they click more then once in order to return to a website, normally done within a short period of time. I am sure you’ve done something like this yourself. You go to a search engine and put in your search term and get the search engine results pages (SERPs). You go back and forth between the SERPs and the actual site. You return to a site by clicking multiple times to the same site by repeatedly clicking on the same sponsored link. All the major search engines understand this and credit advertisers’ accounts for these unintended clicks.
But even here the search engines are at fault. First, they’ve done a very poor job of defining and explaining this to their advertisers. Second, there is technology involved in doing this, be it cookies and/or session based. Advertisers need to be educated about these “back office” functions, and what are the related business terms. Frankly, these terms should be at least 30 days, even if there’s a need to reconcile first and third party cookies at some point.
Fraud Attacks
Your competitor is trying to drive you off the web, it’s that brutally simple, let loose the dogs of fraud! Your competitors can do this one of two ways, manually or with a zombie attack.
Manual attacks are simple. Hire someone to look at the SERPs and click on the ads. Sometimes this is easy to catch because of the repetitive IP addresses, browser signature, country of origin, operation system, etc. Whole businesses popped up in India at one point to commit this type of fraud, but this was easily exposed and stopped. Most of the time you can track this type of attack and produce the audit information needed to get a refund.
A Zombie attack is much more insidious. The perpetrator designs a program that itself distributes a computer virus like program that gets send and installed on 100,000’s of PC. Each PC is then turned into a “zombie” which reports back to its “master” server. The server instructs the zombie to click on specific sponsored links. This is harder to catch because the clicks are coming from many IP addresses over a longer period of time. Further, the zombie virus code may never be found because it’s sitting benignly on each PC, not negatively affecting the PC’s performance.
How Likely a Target is a Website?
B2C vs. B2B
Because business-to-business search terms are much more specialized and the market tends to be smaller, these types of site are somewhat less likely to be targets of fraud. Some people in specialized industries know their search terms and their competitors. Besides, more likely than not, you’d have to look that person in the face at your next trade association meeting.
Highly Competitive
Is the site in a highly competitive space? Some examples of competitive online industries include travel, real estate, credit, and adult content. These are industries that already had problems with affiliates, black hat SEO techniques, spyware, etc. In these industries, competitors have been known to pay to have your site attacked.
Reader Comments.
Click fraud has become a huge problem for companies playing in the PPC and SEM space. Google just happens to be the most visible, especially since they are forking over $90 million USD for the current click fraud problems to go away. The problem is they won’t go away. Click fraud is a problem for Yahoo too, and everyone else in the PPC/SEM space.
Now there is technology available to stem the click fraud tide but, as a colleague of mine expressed recently, if Google turns on the ValidClick switch, their revenues drop by 36% and everyone says “hey, what happened here”. Then Google has to answer why they didn’t prevent the fraud sooner, not to mention the obvious loss of revenue.
We need to look to the next generation of PPC networks to make this problem go away. The newer networks are getting wise and filtering out click fraud from the ground up using tools like ValidClick. But Google has a slipery slope to navigate.
ValidClick appears to be the only technology that filters out click fraud in the click stream itelf. So fraudulent clicks never actually make it through, but are sent to the site host instead.
It will be interesting to see what happens with the Google case but in the long-term they will have to fix the problem or they will be a victim of their own success.
IMO, CPC is itself the problem, as is CPM, CPA, etc. At this stage of
Internet protocol and architecture development, it is too easy to
manufacture clicks, impressions, etc. that can fall under the radar of
any click analysis technology. I have always wondered why Google, as
talented as their engineers are, didn’t realize this.
Leave a Comment
Pages: 1 2 next page »
Article Sponsor
More Features
Latest News
- Reality Bites Google December 3rd 2008
- 2009 Revenue For Twitter December 3rd 2008
- Funding Round-Up: Evernote, Angie’s List, UTest December 3rd 2008
- Ads Not Working? Change The Font December 3rd 2008
- MySpace Breaks Into Mobile Ad Market December 3rd 2008
- Cyber Monday, Profitless Boon? December 3rd 2008
- Yahoo, Rumors and Stupidity December 3rd 2008
- FCC To Mull Free Internet Plan December 2nd 2008
Features
- Down Year Will Bring Opportunities December 3rd 2008
- Mobile to the Rescue December 2nd 2008
- Ideas On Effective Management December 2nd 2008
- Quality Video: DIY (Cheap) or Else December 1st 2008
- Will Widget Channel Be Tuned In? November 26th 2008
Spotlight
Mobile to the RescueADOTAS EXCLUSIVE — The industry is still wary about mobile advertising — does it work, how significant is the ROI [...] more...
Reader Favorites
Classifieds
Most Commented
- Targeting Is the Ad Network "Killer App" (7)
- Vengence is Mine Saith Ballmer (6)
- When Boomers, Gen Y Collide (5)
- Study: Blogs Beat Social Networks on Purchase Influence (5)
- Federal Bailout Proposed for Online Ad Industry (4)
- Ad Networks That Buck the Downward Trend (4)
- Self-Serve Ad Exchange: This Century's Strowger Switch? (3)
- Bust-Outs and Layoffs: Apple, NBCU, Nokia, Spot Runner, WildTangent (3)
