Click Fraud- An Overview

Click Fraud: A Brief History

Shortly after organic SEO became a recognized marketing channel, the pay per click SEM pricing model was launched. Soon thereafter, problems with click validity arose.

In the fall of 2001, while handling the online marketing efforts for the Chase Law Group, I tracked, analyzed, documented, and eventually negotiated a credit for a click fraud case with what was then called GoTo.com (later re-named Overture, which was then purchased by Yahoo!). I spoke with various industry colleagues including Danny Sullivan and Dana Todd about this new “click fraud” issue – and it came to light that this case might make a particularly interesting presentation at the industry’s popular Search Engine Strategies conferences. Danny was interested in the idea and invited me to speak on a panel to share these experiences with click fraud in order to give advertisers information about how to begin to analyze their PPC search traffic for click fraud and invalid click activity.

In August of 2002 at the San Jose Search Engine Strategies conference, Danny requested that I present the click fraud case in the perfecting paid listings panel, and the presentation received great feedback from advertisers who were interested in protecting themselves from click fraud (or invalid click activity). Included in the first presentation was a thorough description of the important data points necessary for an analysis of ppc campaign traffic, including log file data such visitor referral data, ip addresses, browser versions, click streams, traffic patterns, etc.

Since the first presentation on click fraud (also referred to as click spam – all falling within the realm of invalid click activity), I spoke at various other search engine industry conferences about the issue, educating advertisers and challenging Yahoo!, Google, and other search engines to step up to the plate and address this “underground” issue that few care to speak of. In my opinion, when advertisers are paying prime PPC rates for fraudulent traffic that is ultimately resulting in higher revenues for search engines and their commissioned affiliates, there is more that needs to be done to address the issue. One of the most disturbing aspects of click fraud activity is that it is not uniform across advertisers – fraudulent clicks occur with varying frequency across verticals, keywords, and bid prices – with increasing evidence that the higher the bid price, the more rampant the click fraud.

Litigation: The Lane’s Gifts & Collectibles click fraud case.

In 2004 I was engaged by the Plaintiffs’ attorneys for this case as an expert witness to assist them with their class action litigation involving the major providers of search engine PPC traffic.

Click Fraud Overview

Some important (and often overlooked) facts regarding the click fraud issue:

1.) Both the search engines and advertisers agree that click fraud/invalid click activity exists

2.) Both the search engines and advertisers agree that advertisers should not be billed for this activity

3.) The search engines have for years told advertisers that their accounts are protected, that the search engines have “systems in place” to protect advertisers from click fraud

The questions, then, become:

– What constitutes a fraudulent click?

– What (and whose) data is used in scoring a click as “fraudulent” or “invalid”?

– When will the search engines admit they cannot address this problem alone?

Click fraud: A Definition

In my opinion, fraudulent clicks or “click spam” can be defined as any kind of click received from a cost per click (cpc) search engine – or from any other online traffic source that is using the cpc pricing model – that occurs with zero possibility for a conversion to occur, or for a web site visit from a legitimate user to occur. Fraudulent clicks happen on a regular basis and to a much greater extent than the cpc engines would have you believe, and while the cpc engines are “working on it” – the burden rests squarely on the advertisers’ shoulders to identify this kind of costly traffic.

One form of fraudulent clicks, and perhaps the most difficult to identify, comes in the form of manually generated clicks, induced either by direct cpc competitors, or by human-driven operations set up for the sole purpose of generating affiliate revenue off of the cpc pricing model. Another method of fraudulent clicking is initiated through automated click generation methods, using bots – software applications specifically designed to click on paid listings. this kind of activity is also initiated by both competitors and by search engine partners and/or affiliates, the latter often instituting extensive technology arrangements to enable their fraudulent click traffic to slip past the internal filtering methods used by the cpc engines. For cpc affiliates, there is a vested interest in generating as much traffic as possible to increase their portion of the shared revenue generated by paid listings. This is an often overlooked source of fraudulent click activity.

The search engines are working to combat such activities, as many of my conversations with them have proven. However, I believe that for publishers to do everything they possibly could do to combat “questionable traffic” is to some extent not in their best interest – as even one half of one percent of click revenue adds up to a very large number to these companies. In my opinion, one half of one percent of traffic is still advertising dollars spent unnecessarily.

It is no secret that click spam is something that few in the search engine marketing (or SEO) industry have cared to discuss, for various reasons – lack of knowledge or direct experience with this type of cpc traffic, an unwillingess to address flaws in the pricing/advertising model, or a general lack of awareness of the issue. In recent years, however, we have seen more attention placed on the analysis of ppc traffic validity – a sign that the industry is maturing and that advertisers are taking the initiative to get more granular with their marketing campaigns.

Do you think you are a victim of click fraud?

While some advertisers can receive quality traffic from paid search, the cost is high when “fake” clicks are generated to your site’s urls. If you think your ppc campaign funds might be depleting unnecessarily due to a competitor’s fraudulent click activity, to affiliate-generated fraudulent activity, or if you are simply suspicious of overly expensive traffic spikes that occur with zero page views or without any increases in sales – then perhaps you should start getting more granular in your analysis of your ppc marketing campaigns.

The first step in identifying fraudulent clicks is to implement a tracking system that allows you to track all of your ppc advertising sources independently, down to the keyword. in the most simple example, you can asssign unique session id’s to each of your urls within your ppc campaigns and then use a basic log analyzer program to begin to investigate the ndata on the clicks received on each url, including date, time, referrer, page views, etc. On a more comprehensive level you need to track conversions, either in-house using your own conversion tracking system, or by using a third-party conversion tracking tool.

Once you have a tracking system in place you are ready to take the next step to determine whether or not your campaign is receiving any questionable traffic. the following are some general guidelines to help you through the process:

1.) Be thorough

– make sure you have a legitimate case
– show data that legitimately points to questionable traffic
– double-check your data – crying wolf will get you nowhere!

2.) Document your traffic analysis

– your observations and analysis are the most important
– include handwritten notes, email exchanges, scribbles, and highlighted reports

3.) Record all click data

– from server logs to third party traffic reports

4.) Take screen shots

– document all relevant competitor positioning and web-based third party reports, when applicable

recommended click fraud action items

1.) Contact other competitors if you suspect competitor clicking

– your ppc campaign might not be the only one experiencing these clicks by a competitor
– two victims’ data can make a stronger case.

2.) Contact your paid search account representative

– explain your situation, provide your account rep with well outlined data, and give them the opportunity to investigate. their investigations can, and do, take time…

3.) Benchmark your data

4.) Consider investing in SEO to supplement your paid search efforts

Related Articles:

click fraud gets smarter -businessweek
february 27, 2006

click fraud: how real is the threat? -emarketer
march 6, 2006

google shares may fall another 50 percent -abc news
february 12, 2006

click fraud chaos -new york post
january 29, 2006

the truth about google and click fraud -thestreet.com
january 27, 2006

kanoodle and click fraud -searchenginejournal.com
september 22, 2005

so many clicks, so few sales -inc. magazine
august 2005

internet advertising fraud places google, yahoo on defensive -los angeles business journal
august 29, 2005

click fraud threatens rising online ad revenue -informationweek
may 2, 2005