In the fall of 2001, while handling the online marketing efforts for the nationwide Chase Law Group, I tracked, analyzed, documented, and eventually negotiated a refund for a click fraud case with what was then called Goto.com (now Overture). I spoke with various industry colleagues about this new "click fraud" issue and it came to light that this case might make a particularly interesting presentation at Jupiter Media's Search Engine Strategies Conferences.

Danny Sullivan 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 CPC traffic for click fraud.

In August of 2002 at the San Jose SES Conference, I presented the click fraud case in the Perfecting Paid Listings panel - and received great feedback from advertisers who were interested in protecting themselves from PPC click fraud. 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 stream, etc.

After the SES conference, Cat Seda published an article for Search Engine Watch including an overview of the August SES Click Fraud Auditing Presentation. She later went on to publish my PPC auditing methodology and initial case study in her search engine marketing book entitled Search Engine Advertising: Buying Your Way to the Top to Increase Sales.

After the SES presentation in 2002, a few forward-thinking companies also began to address this important issue and published some of the presentation data, including SubmitExpress in their article entitled: CPC Fraud - Is it Happening to You? .

Since the first presentation on click fraud (or click spam as some call it), I have been speaking at SES and various other industry conferences about the issue, educating advertisers and challenging Overture, Google, and other CPC 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 CPC rate for fraudulent traffic that is ultimately resulting in higher revenues for CPC engines and their commissioned affiliates, there is more that needs to be done to address the issue. My first PPC auditing presentation, which was originally grouped into the "Perfecting Paid Listings" session, earned its own session aptly titled "Auditing Paid Listings" - and is a currently recurring session at the Search Engine Strategies conferences.

Alchemist Media Click Fraud Auditing Services

Since presenting the initial case study in 2002, our company has been providing PPC advertisers assistance in identifying and obtaining refunds for click spam activity within CPC campaigns. If you are concerned about fraudulent clicks and would like to discuss your situation, or if you are looking for peace of mind that comes with knowing your CPC campaign traffic is being continuously audited for fraudulent clicks and that there is a team with the experience to earn you a refund, Ask Us about our Click Fraud Auditing Platform^TM and Click Fraud Auditing & Refund Services.

 

Recent Click Fraud Aticles:

With Each Technology Advance, a Scourge - NY Times
October 18, 2004

New Attacks & Defenses in Click Fraud War - Datamation
September 21, 2004

Lost Per Click: Search Advertising & Click Fraud - SearchEngineWatch.com
July 29, 2004

Exposing Click Fraud - CNET/News.com
July 18, 2004


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. A recently publicized case of PPC fraud covered by the India Times has received a lot of press, however it is certainly not the first of its kind - this activity has been, and is occurring all over the world.

Another method of fraudulent clicking is initiated through automated click generation methods, using "hitbots" - software applications specifically designed to click on paid listings. This kind of activity is also initiated by both competitors and by 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 CPC search engines are working diligently to combat such activities, as many of my conversations with them have proven. However, I believe that for the PPC engines 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 a company like Overture, or Google. In my opinion, one half of one percent of traffic is still advertising dollars spent unnecessarily.

Recent Industry Acknowledgements

It is no secret that fraudulent PPC traffic (or click spam) is something that few in the search industry care 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. Recently however we have seen a bit 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.

Recently (and most likely due in part to the looming Google IPO), we have finally seen an increased focus placed on the issue of auditing PPC campaigns. At the recent Search Engine Strategies Conference in Toronto, MarketingSherpa Metrics Editor Andrew Latzman was in attendance to cover the three day event. In his roundup coverage of the conference, he ranked PPC fraud as one of the hottest topics at the event.

Earlier this year, we also saw some interesting coverage of fraudulent click behavior that has actually been going on for some time, all over the world and in the United States. The India Times published an article detailing fraudulent click operations performed by one India-based company. This article is a fairly accurate example of one type of click spam that continues to occur with great success throughout the world as a revenue generation method that ultimately depletes the marketing dollars of CPC advertisers without the possibility for a conversion to sale or other legitimate web site visit.

And finally, we have the story of the Google AdSense extortionist, an eager software developer who thought he had invented the novel concept of creating software (often called "hitbots") to defraud CPC advertisers. Based on what he thought was a strong leveraging point, he attempted to bully Google into paying him for his click fraud application, with threats of "releasing it to spammers" if Google didn't pay him for the software or hire him as a consultant. Unfortunately, this fellow was not aware of the state of click fraud in the industry, that thousands of people like him have already developed similar systems and they are in use every second of every day - and the major CPC search engines know all about them.

Read Google's Acknowledgement of Click Fraud in Their SEC Filing

Do You Think You Are a Victim of Click Fraud?

If you think your cost per click campaign funds might be depleting unnecessarily due to a competitor's fraudulent click activity, 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 CPC and PPC marketing campaigns.

The first step in identifying fraudulent clicks is to implement a tracking system that allows you to track all of your CPC 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 can also begin to track conversions, either in-house using your own conversion tracking system, or by using a third-party conversion tracking tool. While Google and Overture have rolled out their own conversion tracking systems that advertisers can now use for "free", I do not feel comfortable encouraging advertisers to surrender their internal business metrics to the CPC engines. There are plenty of low-cost conversion tracking solutions out there that keep your valuable business data confidential.
 

Next Steps for Fighting Click Fraud

 

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 CPC 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.) Continue to Monitor Your Click Activity! http://www.alchemistmedia.com/CPC_Click_Fraud.htm