By Joanna L. Krotz
If you run any Web advertising at all — and who doesn't nowadays? — you no doubt know a lot about "click fraud," one of the latest bits of thuggery to hit the online world.
Like spam or viruses, click fraud can cause serious damage. It bears a watchful eye, a careful purse, and combat readiness. But it shouldn't keep you from leveraging the benefits of search engine marketing.
This article provides a rundown on what these paid search ad scams are all about, including fraudulent sources to guard against, and how you can help protect your online marketing efforts.
What is click fraud and why is it on the rise?
Click fraud is defined as someone who clicks on a paid search ad with harmful or dishonest intent. The click is made to artificially rack up fees rather than because of interest in your goods or services. As a pay-per-click marketer, you must then cough up the amount of illegal clicks on your paid listings but you gain nothing — not the sales or leads you seek.
Sadly, click fraud is the price of the Web's success. In rather short order, Internet advertising, including search engine marketing, has gone from a dot-com joke to nearly a $10 billion business, according to PricewaterhouseCoopers. And growing. In other words, there's now real money in them 'thar clicks.
By 2005, the average cost of popular keywords had risen to $1.75 a click, with some hot industries even higher, including an average $5.39 per click for mortgage/refinancing services and $1.85 for telecommunications/broadband, according to the ZDNet Index. Multiply those numbers by thousands of illegal clicks and fraud can get costly.
Where do click-fraud artists come from?
Typically, there are four likely sources.
Your competitors. If your competition can neutralize your ad budget by fruitless clicking on your keywords, you lose and they win. It's hardly cricket, but it is happening.
Contextual ad users. Also called "content-related," these paid search ads are served up by an engine on selected affiliate sites to match a user's interest. For instance, you might pay to have your Miami rental car ad appear whenever users search for South Beach hotels. Engines like MSN, Google and Yahoo! pay site owners to run your ad on a per-click basis, charging you for the click. Shady site owners click illegally to boost their revenue payout. Some thieves are now developing sites for the sole purpose of clicking content-targeted ads for money. Either way, you end up the loser.
Software and hackers. Some scammers automate the fraud by using so-called "bot" software, which are robot programs to rack up thousands of clicks per hour.
Paid clickers. Companies, often based in places like Russia or Asia, pay low-wage workers to click. The Times of India recently reported on Indian housewives and college students who are earning up to $200 a month clicking on ads for a few hours a day, without really knowing it's fraud.
Increasingly, the large search engines are wise to such schemes. Google, MSN, Yahoo! and others are actively installing tools and safeguards to block click fraud. When the engines uncover illegal clicking, you get a refund. (BlowSearch, a metasearch engine that pulls results from some 27 search engines, guarantees its advertisers they will receive legitimate traffic — or their money back.)
But scammers often operate under the radar, and, anyway, you shouldn't depend on the search engine to find out if you're a target.
How can you prevent click fraud? To date, the dire warnings about a click-fraud plague seem overblown. "A lot of mainstream media are spooked about click fraud," says Greg Jarboe, spokesperson for the Search Engine Marketing Professional Organization (SEMPO). "And while it's a real issue, it's not a serious problem for small business."
For instance, a recent SEMPO survey of large search marketers and industry pros found that a quarter of respondents have indeed tracked fraud as a problem, yet only 6% said it was serious. Most respondents (45%) were concerned but had not tracked any actual fraud. A quarter didn't see a problem at all.
Still, forewarned is forearmed. You can minimize the threat of click fraud by taking these steps.
1. Combine paid and organic (free) search. Pay to learn which keywords work or to gain placement at certain prime times. But rely on free search as well, first optimizing your site pages by using tools such as Microsoft Submit It!
Review your traffic logs every day. If you get a lot of hits but visitors aren't hanging around, watch out. "Carefully monitor rapid drops in Web site conversion with corresponding spikes in paid search traffic," says Rachel Atkinson at Marketing Experiments Journal, a research group. "This type of rapid change in metrics could indicate someone or something is manipulating your search campaign." Tools such as Microsoft's FastCounter Pro make traffic analysis automatic and cost-effective.
2. Monitor Internet Protocol (IP) addresses. "An abnormal number of clicks from the same IP is another sign of click fraud," says Boris Mordkovich, developer of AdWatcher, an online tool for eliminating fraud.
3. Balance your ad budget. Don't put all your ad dollars into search alone. Smart marketing targets customers via different media.
4. Buy keywords that can inoculate you. Scammers have no incentive to click on specific phrases or keywords that sell for $1 or less, but either one can work very well for you. Same is true for misspelled keywords. Some experts estimate that one-fifth of all searches are input as misspellings. You can leverage that fact by buying common misspellings of your most popular keywords.
5. Hire a watchdog. A dozen or more fraud auditing services have sprung up to police pay-per-click (PPC) campaigns. For example, PPCTrax.com, based in Chandler, Ariz., and founded in February 2005, already has 30 or more clients, according to Skip Pratt, one of the founders. The company offers an affordable monthly starter package for $30 for small to medium-sized businesses that covers one URL and 10,000 clicks per month.
"Small businesses don't have the time and can't spend time auditing their search ads," says Pratt. "We worked on our tool for over a year before launching and we promise to respond to any customer need within four hours." Other pay-per-click monitoring services, such as Atlas One Point or Keyword Max, run about $80 to $100 a month.
Like all marketing, you'll get a better payoff from pay-per-click ads if you build in benchmarks and tools to track performance.