Los Angeles based search engine marketing expert Jessie Stricchiola, CEO of Alchemist Media Inc. seems to have inherited the position of industry pay-per-click (PPC) fraud champion since she first wrote about it back in 2002.

Having recently been subjected to click fraud on a minor scale personally, and on a much larger scale with two of my clients, I contacted Jessie to get her expert opinion on just how big the whole click fraud issue is.
 

And to find out what can be done to detect it and attempt to prevent it, if anything at all.

There’s a lot more to click fraud than just the act of somebody clicking on another advertiser’s advert at a search engine.
 

It’s actually much more complex and devious.

Generally speaking, there are two different kinds of click fraud (there’s also "impression" fraud which affects only Google advertisers and differs from pure click fraud).
 

On the "click" side it occurs, primarily, from two different sources: competitors and affiliates.
 

So identifying click fraud begins with being aware of how different it can look depending on its source.

And then, the whole murky issue breaks down from there to search clicks, as in those invalid clicks on PPC adverts which show up at the search engine interface, and content clicks, those which are invalid clicks on search engine adverts distributed around other partner web sites e.g. Google’s AdSense programme.

So, what do we, the under attack honest advertisers, do to find out if we are haemorrhaging our hard earned budget to fraudsters and not customers?

"The ability to identify click fraud in the early stages depends on the amount of data you can get your hands on. And without using anything other than the reporting mechanism given to you for free by the PPC engines, you’re not really going to be aware of anything" says Jessie.

“You need to have access to log and/or visitor data. It’s about looking at your log files using a log analytics application. Or you need to be looking at your traffic from a third party traffic analysis application [e.g. web analytics vendor]. Or from a third party campaign management/traffic analysis tool.” [e.g. PPCBoss]

And even though, when you do the most basic analysis, you’re likely to spot that, Overture, for instance, is charging for a lot less traffic in their management area, than you see in your logs (so they are filtering out some clicks they deem invalid) you still need to look deeper to spot ongoing click fraud activity.

Key to the success of spotting click fraud is the ability to track unique URL's.
 

So it's essential to hard code an ID for the PPC engine, as well as the keyword ID into the URLs of your landing pages.

Perhaps, the most obvious example of spotting click fraud, is simply by observing any spikes in traffic.
 

If you're used to checking your stats at the PPC engine management area and seeing an average of, say, 30 clicks per day on a specific keyword, and that then changes for no known reason to over 130 clicks per day, then that’s a certain indicator in itself.

Beyond that, Jessie recommends looking for patterns.
 

"Start to look for, say, repeated clicks from sources that look similar. This could be an IP address or an IP range. It could be a combination of IP range; browser version; operating system. If it’s not the IP range, you may detect clicks from the same geographical region i.e. the clicks are all in the same time frame. You really have to look for data in groups which happens to look suspect.”

There are other reasons that you may be seeing strange activity adds Jessie: “It could be a new competitor, so take a look and see if somebody new has jumped into the mix and started clicking on your ads. It could be affiliate fraud, in which case there may be a new affiliate partner in there, or there could be a new content partner. And as you know, many AdSense content partners just generate clicks to make money for themselves.”

Someone who experienced this first hand, is Jake Baillie, Product manager for Toronto based True Local.

He arrived at work one morning to discover that, a popular search term his company had been bidding on, which averaged 60 clicks per day, had already registered 3,800 clicks by mid morning.

Fortunately for True Local, Jake is a highly regarded, professional search engine marketer.
 

So it didn’t take him too long to smell a rat.
 

However, a less seasoned online marketer may have just thought they were having a good day!

The first thing Jake spotted was that, these were content clicks, not search clicks.
 

"Google breaks out search clicks, but they don’t break out content clicks. As soon as I became aware of that, I went to our own reporting system and saw that the clicks were all around this one term and that they had come from somewhere in Google’s network."

With some more detective work using a list of open proxy servers Jake was able to eliminate those in the first steps.
 

Open proxy servers are used by those involved in click fraud to be able to relay traffic anonymously.
 

And usually, if you can prove that the clicks are coming from an open proxy server, it can be much of an open and closed case with the search engines.

The next thing Jake did, was to look at all of the referrer data he had available and discovered that they were coming from three main AdSense pages that, as he says "were not above board."

These are pages which were designed specifically for adverts and not for end users.
 

And this is strictly against Google’s AdSense terms of service.

So, what do you do next?
 

Contact the search engine and pass on the evidence, of course. At this point, you may be thinking, shouldn’t it be the other way around, “surely a search engine could spot that kind of fraudulent activity and notify me.”

It has to be said, there are many people in the industry who hold a very cynical view about the amount of time and technology search engines are likely to employ for this type of monitoring.
 

Let's face it, click fraud is bad news for the advertiser, but it’s still pouring millions into search engine bank accounts.
 

So, is it feasible that they really would want to put such a concerted effort into something, which effectively, helps them make less money?

In Jake’s case, he presented them with refined data which he’d pulled together himself. Once Google had analysed the data, they got back to him (within five days) and agreed that it was fraudulent activity and agreed to a refund.

I have to say, in my further conversations with both Jessie and Jake, we were all agreed that, as Jake put it "there’s an insane number of PPC advertisers who don’t bother tracking. They don’t bother using unique URLs for monitoring and ROI purposes."
 

So, the fact remains, if you don’t spot it and it slips under the wire at search engines, that "blissful ignorance" probably amounts to many millions of dollars.

Jim Banks is the owner of Web Diversity one of the fastest growing search advertising agencies in the UK.
 

He understands that click fraud is a problem which is not going to go away very soon.
 

However, from his own experience, it is more of a problem in certain sectors than it is in others.

“In some sectors we have no problem at all with click fraud. In our experience, it tends to be more in the higher value keywords in travel and finance, those areas.”

But, as both Jessie and Jake have shown, when it comes to spotting the elements of fraud, you really have to be the vigilant one.
 

Jim agrees: "We had a situation with a client in the financial services sector. It’s part of our service to our clients to monitor for unusual activity, as everything we do is based around ROI. So we look at everything where clicks are concerned, the time of the day, the day of the week etc. etc. With this particular client, we came to the conclusion that most people in the UK who apply for a loan are insomniacs, because the abnormal traffic was occurring between midnight and 7.00 in the morning!"

As with Jake, Jim was able to go to the search engine, in this case Espotting, present them with the evidence and they were happy to acknowledge and refund.

There’s a lot of publicity surrounding the reported case of Google filing a law suit against a fraudulent AdSense publisher.
 

They’re happy to use that example as a possible deterrent to future fraudsters.
 

And also promote the anti-fraud technology they have developed in-house.

However, the general consensus from people I’ve spoken with is that it’s possibly much more of posturing exercise for Google.
 

As Jim Banks pointed out, it’s more likely a case of the publisher doing a very bad job of click fraud, than being captured by Google’s high end technology.

Mike Grehan is the author of Search Engine Marketing: The essential best practice guide.