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September 27, 2005

Search Engine Develops Click-Fraud Tool

DMnews.com talks about a 3rd tier pay-per-click search engine SearchForIt.com that has developed a tool to help track and determine the probability of legitimate users clicking on pay-per-click ads. The product "Fraud Print" is currently only available to SearchForIt.com advertisers. They also mention that they are open to marketing the product to advertisers to use with other pay-per-click providers. They have stated that advertisers that have used this product have improved their return on investment.

It's known that second- and third-tier pay-per-click search engines have less traffic and more click fraud then 1st tier pay-per-click search engines. This is because a majority of their traffic comes from their affiliate/content partner networks and not their own search page. They partner because they don't have enough traffic to substantiate advertising only on the search pages. If they partner with just a couple of bad affiliate/content networks they may gain tons of fraudulent activity and of course more revenue. This in turn becomes a bad investment to advertisers and ultimately bad for the pay-per-click search engines.

Google and yahoo also say that they have technology that protects against click fraud. So how is this "Fraud Print" tool any different? They say they can capture a "fingerprint" of the computer that clicks on the ads. In any case this is a good way for SearchForIt.com to gain more advertisers. By opening up communications and making the advertiser feel like they are in charge and more knowledgeable of what is going on. Enabling the advertiser to track, optimize, and manage there advertising dollars efficiently.

Will they open "Fraud Print" to be able to track Google and Yahoo's pay-per-click advertising and will it identify robotic click fraud? Regardless, what advertisers really want is more clicks, sales, and signups. With more advertisers going online there needs to be good way of stopping click fraud and getting higher percentages of converting traffic. For this to happen they need more effective advertising inventory that gets a better return on investment.

DMNews.com
The online Newspaper of Record for Direct Marketers


Executives at a Canadian search engine are so intent on preventing click fraud that they developed their own fraud-prevention technology for their advertisers.

Click fraud is an elusive problem for advertisers, and even industry experts disagree on the extent of the problem. Studies estimate that click fraud accounts for anywhere from 10 percent to 30 percent of all clicks.

Search for It, Toronto, developed a proprietary technology, Fraud Print, that tracks the "fingerprint" of a user's computer when the user clicks on its advertisers' links and conducts a series of tests to determine the probability that the click is legitimate.

"The primary reason [it was developed] was to address the issue of increasing our traffic levels via external distribution channels while maintaining qualified clicks for our advertisers," said Eric Thaler, business development manager at Search for It.

Some advertisers have noticed a greater return on investment than before Fraud Print was implemented, Thaler said. The technology also benefits Search for It, he said, by "creating a situation in which our advertisers look to continue to replenish their account balance."

Though Fraud Print is used only within Search for It, executives are considering marketing it as a standalone product that advertisers could buy for all of their pay-per-click campaigns in the near future.

Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

Sept. 27, 2005

By: Christine Blank
Contributing Editor
cblank@dmnews.com

http://www.dmnews.com/cgi-bin/artprevbot.cgi?article_id=34211

Posted by dj at 08:16 AM | Comments (0)

September 23, 2005

"click fraud is THE issue" states GOOGLE

Jeff Martin comments in both of his blogs about what Brian Devill from Google said at the Dallas/Fort Worth Search Engine Marketing Association monthly meeting.

...Google will openly work with and accept data from 3rd party providers and that they want to know anytime suspicious activity occurs in advertising campaigns.
... "click fraud is THE issue". The fact is that even advertisers that let Google directly manager their PPC campaigns (i.e. : Fortune 1000 companies) are very concerned that Google themselves is having difficulty in monitoring and detecting click fraud.

http://www.vericlix.com/2005/09/google-confirms-click-fraud-is-top.html
http://zen-sem.blogspot.com/2005/09/google-click-fraud-is-issue-for-our_22.html

http://www.dfwsem.org/agenda.html

Posted by dj at 11:40 PM | Comments (0)

September 22, 2005

Kanoodle and Click Fraud

Here is story of John Cunningham and his experience with computer generated clicks and Kanoodle a 2nd / 3rd tier PPC Search Engine.

Kanoodle and Click Fraud

Click fraud is a virus which has spread for years in the online advertising industry. As advertising payment systems grew from per click to CPM or commissions, click fraud seemed to be on the low for a couple of years. Enter paid search network distribution and contextual advertising and the net world was introduced to a new form of click fraud from numerous sources.

Yahoo and Google both claim they are stopping click fraud in its path with technical security measures and prosecution. But when a search marketing company takes its campaigns beyond Yahoo, Google, MSN and Ask to companies like Lycos, Findwhat, Looksmart, Searchfeed and MyGeek; it is only natural for such marketers to worry about fraudulent clicks. Hence the formation of Click Fraud monitoring services like Who's Clicking Who and Keyword Max.

Enter Kanoodle. I spoke with John Cunningham of Hamptons Bride Magazine earlier this year about a piece he printed on Kanoodle and click fraud. I would have probably not even paid much attention to the piece had I not extended a proven search marketing campaign to Kanoodle for one week, and experienced not-so-pleasent results. Below is a shocking first-hand tale of one companies experience with Kanoodle and click fraud.

Are we saying that Kanoodle is suspect of committing click fraud? I'm not the technical authority to answer such a question and will let the readers of this piece decide for yourselves. The following is John Cunningham's story of his experience with Kanoodle and computer generated clicks.

Over the last few months we have been using multiple avenues of internet marketing including Overture and Adwords. Our positive results with the two companies made me search for other PPC programs. I stumbled across an ad on GoDaddy.com for Kanoodle.com and seen the cpc was less than the two major search engines and decided to give it a try.

I was extremely impressed my first day up seeing the amount of traffic I was getting by logging into my account and with the lower cost was getting more traffic than from Google and Yahoo's programs. We are very meticulous when it comes to tracking our readers and use this information daily to make sure we are not only giving our readers what they want but also giving our Advertisers the results that they need.

After reviewing our stats we noticed a HUGE problem with the clicks coming from the Kanoodle network. 100% of all traffic coming from them stayed for a whole ZERO seconds. Our readers stay over the last few months has averaged around 2.5 minutes and up to 4 to 6 hours. At first I thought maybe it was because we were new to the network and gave them the benefit of the doubt, but as days passed the results were the same; not a single click from Kanoodle ever had a visit length over Zero seconds. How is this possible?

You would think that they would get lucky at least once and have one click through stay at least 2 seconds to read our splash page before they exited. It is our conclusion that Kanoodle is completely computer generated clicks, not human generated. I am writing this hoping others will read and not be Kanoodled as I was. As an online business I understand the importance of generating traffic to our website and find it very discouraging that such blatant deceit would come from what I thought was a legitimate company. I will be posting our stat results for you to view and you can come to your own conclusions.

Here are the results generated from Statcounter.com. I have highlighted the clicks coming from Kanoodle and underlined the ones from google and yahoo. You will also see 90% of the traffic generated from kanoodle happens from 12am to 2am. We do not get any traffic from them during the day. Be sure to read the last two pages so you can see what our normal traffic looks like...

Read John's further experience with Kanoodle in "Kanoodle Follow Up"

Posted by - Loren Baker, Editor @ 7:17 am

http://www.searchenginejournal.com/index.php?p=2235

Posted by Hans A. Koch at 07:17 AM | Comments (0)

September 15, 2005

Why CPA is Not a Cure for Click Fraud

A new article talking about how Cost Per Action may NOT be the solution to the Click Fraud problems and how it's up to the search engines to do something.

Isaac Scarborough reviews the click fraud controversy and lets us know why CPA isn't a panacea for the industry.

Rarely does the first solution to a problem actually succeed. How often do we hear about a new breakthrough drug that's supposed to work wonders? Then comes a realization: oops, this doesn't work as well as it was expected to, and now we need a new approach. This seems equally true in the marketing biz: when a new technology or advertising program is rolled out, we can't be sure that it will appeal to its target audience or solve the problems at hand. We've really just got to watch and wait.

Just like everyone else, trial and error is sometimes our only choice.

This should be easy to see in the rapidly-changing debate over click fraud. Of course, click fraud has been around for a long time, but in the last year has a lot of serious attention been paid to overcoming the problem. The discussion has calmed down for the moment, but you never know when it might flare up again. Moreover, I think we might learn a lot about future initiatives by taking a closer look at what's been said in the past.

There have been three major suggestions for dealing with click-fraud:

1. Look to the FTC: This hasn't been mentioned recently, but about a year ago -- when reports of rampant click fraud began to surface -- it wasn't clear at all what the response should be. Google, approaching its IPO, was talking up its "fraud squads" but many wondered if click fraud would prove to be a serious problem for search-based advertising. So it was suggested by some that the FTC needed to step in and mandate changes.

2. Take a case-by-case approach: Cooler heads -- primary amongst them, iMedia's own Kevin Ryan -- prevailed. Early and overblown reports of click fraud were scaled down, and instead of looking for an industry-wide answer, it was suggested that marketers should keep a closer eye on where clicks are coming from. Ryan outlined a number of methods for tracking ads that might be fraudulently clicked on, and new technological solutions began to appear from companies like ClickLab, and Zunch, which has a new Click Fraud Detective.

3. Move away from CPC: More recently, Ron Belanger argued here in iMedia Connection that to deal effectively with click fraud many of the smaller search engines need to move away from the cost-per-click payment model, and instead embrace the cost-per-action (CPA) model used by many affiliate networks. The affiliate networks seem to have done well with it CPA, and many of them are moving away from CPC entirely. And they, as Belanger suggests, will tell you that CPA is something of a panacea for most issues of fraud.

This newest argument has much to recommend it. And I think my basic inclination is to agree with Belanger: CPA avoids click fraud. So, if the search engines were to make this move, there would be less click fraud. There's something to this. But it forgets that for this to occur, search engines are going to have to make the move. And this, I think, is less obvious.

Most of the affiliate networks that I've spoken to recently generally confirmed Mr. Belanger's belief that CPA is a remedy for Fraud. Elizabeth Cholawsky, Vice President for Marketing at ValueClick -- the parent company of affiliate leader Commission Junction -- said that ever since 2001 Commission Junction has only worked with a CPA model, in large part to avoid problems of click-fraud.

But Ms. Cholawsky also pointed out that CPA doesn't get rid of fraud entirely. "We have a dozen people whose job is entirely network quality," she said, and I got that sense that she felt it wouldn't be bad to have even more. There hasn't been a lot of chatter about CPA fraud (although there are a few reports), but this shouldn't necessary lead to treating CPA as a true panacea for fraud.

Others in the affiliate space agree. Choots Humphries, President of LinkConnector advised me that "there's still a lot of fraud in affiliate marketing." CPA pricing goes a long way, he argued, but one still has to be on guard. And just as important, Mr. Humphries said, was the fact that "a lot of merchants left the affiliate game because they couldn't participate in CPA" due to the increased technological sophistication necessary.

The real difficulty may actually have more to do with incorporating search engines and merchants into the CPA model than avoiding click fraud once they're there. When I asked Lance Podell, CEO of Kanoodle -- a search engine mentioned explicitly by Belanger -- if his company had any plans to move away from the CPC pricing model, he told me, "Kanoodle's current pricing standard is cost-per-click, and while we are always looking for improvements to our business, we do not have plans to change this model in the foreseeable future."

I think we can understand why. There's a certain niche to be filled here -- a lot of smaller merchants choose CPC because of its simplicity and perceived efficacy. And if the search engines were to shift towards the more complicated CPA model, they could easily alienate a large number of these merchants.

The pay-per-click model is probably here to stay -- and not just with the biggest players like Google and MSN. It might make sense for some players to move towards the CPA model eventually, and we should always applaud an idea that looks for a way that the industry can police itself. But for the moment, we're probably going to have to stick with the more incremental solutions, dealing with cases of click fraud individually (and there are a number of new technologies that are making this more effective). And even moving to CPA doesn't entirely alleviate the need for a bottom up approach -- pay-per-click or not, you've still got to watch those traffic numbers.

Isaac Scarborough covers market trends for Chapell and Associates, a consulting firm that helps companies understand privacy and incorporate consumer perception into product development. He has worked briefly in the offices of Senator Domenici (R-NM), where he assisted legislative aides with the Senator's role as Chairman of the Senate Energy Committee. Prior to this, he was with e-thePeople.org, a non-profit organization dedicated to promoting deliberative democracy online.

By Isaac Scarborough

http://www.imediaconnection.com/content/6751.asp

Posted by Hans A. Koch at 03:50 PM | Comments (0)

Texarkana Click Fraud lawsuit stays in State Court possible settlement?

Miller_County_Ark.gif

Miller County Trial venue

For the second time the Court of Appeals said that Texarkana Click Fraud case will be done in Arkansas not at the Federal level like the Search Engines wanted. The big four search engines Google, Yahoo, Ask Jeeves, and MSN think that going to Federal Court will get better benifits (appeals are less restrictive). Now if the courts demand data there is little they can appeal. This is a big win for Lane's Gifts & Collectibles

The interesting part is one of the big networks may settle by offering their data to a 3rd party clearing house. Here is a quote from Jeff Martin's blog

...one of the major networks might be willing to 'make a deal' and work something out. What he was referring to was the possible establishment of a clearing house model where a 3rd party would be charged with making the call on click fraud claims.

Essentially the PPC network would allow the clearing house access to their data and the advertiser would submit their data and claim to the clearing house as well. This seems like a sound solution, one which would probably put the PPC networks back into a positive light with advertisers.

This is the exact same thing that Jess Stricchiola, president of Alchemist Media spoke about at the SES "Auditing Paid Listings & Click Fraud Issues" Track in San Jose. The questions remain - Will Google and others release information to a 3rd party?

http://newsobserver.com/24hour/business/story/2720062p-11283826c.html
http://www.siliconvalley.com/mld/siliconvalley/news/12646040.htm
http://www.marketingvox.com/archives/2005/09/15/click_fraud_suit_sent_back_to_state_court/index.php
http://www.twincities.com/mld/twincities/business/technology/12647186.htm
http://sfgate.com/cgi-bin/article.cgi?f=/news/archive/2005/09/14/financial/f153138D08.DTL
http://www.forbes.com/2005/09/15/schmidt-google-stock-cx_cn_0915autofacescan04.html

Posted by Hans A. Koch at 11:52 AM | Comments (0)

September 02, 2005

Who's Clicking Who on WebmasterRadio SES Wrap-Up

Who's Clicking Who speaks on the WebMasterRadio show. The archive Podcast is available here. On the 61st minute of the 75 minute broadcast they interview Brian Boockholdt of Who's Clicking Who.
Below are the details about the Radio show.

WebmasterRadio.FM to Air Exclusive Search Engine Strategies Conference Wrap-Up Radio Special

The live special will discuss the features and highlights of August's Search Engine Strategies conference, the largest and most important conference dedicated to the search engine and search engine marketing industries.

Fort Lauderdale, FL (PRWEB) September 1, 2005 -- WebmasterRadio.FM, a free, 24/7, internet business radio network, announces an exclusive "wrap-up" radio special covering the highlights of the Search Engine Strategies conference held August 8-11 in San Jose, California. The SES "wrap-up" radio special will be broadcast live, Friday, September 2, 2005 at 10 a.m. EST on http://www.WebmasterRadio.FM and will also be available in Podcast format.

The exclusive special will provide insight into this month's hugely successful Search Engine Strategies conference, including seminar highlights and after-show tips.

The SES "wrap-up" radio special will be hosted by Search Engine Strategies Conference Chair and Organizer, Danny Sullivan; Brandy Shapiro-Babin of WebmasterRadio.FM; and Sarah MacKay, also known as Ms. Write of WebmasterRadio.FM.

The exclusive radio special will provide information and tips to both conference participants and those interested in further involving themselves in the search engine community. Interviews with trade show contributors and exhibitors will help to unravel the SES experience and provide what attendees "need to know" to maximize this month's event.

"After the dust settles from an event like this, it's important to get a good perspective on what you learned and what you will take with you," explained Brandy Shapiro-Babin, WebmasterRadio.FM's Vice President of Marketing. "This month's Search Engine Strategies conference was a huge hit, and our radio special will enable participants to get the most out of their experience."

Special guest interviews will include Monte Cahn, CEO of Moniker.com; James Speer, Vice President Marketing and Products, IAC Advertising Solutions/AskJeeves and the Vice President from Who's Clicking Who.

About WebmasterRadio.FM
WebmasterRadio.FM strives to lift the "veiled curtain" of the Internet to bring the business community together through an interactive radio network. Its listeners are a global group comprised of everyone from corporate executives and decision makers to individuals who work for themselves, small and mid-sized businesses to those just starting out. The WebmasterRadio.FM listening audience has a vast appeal to anyone looking to learn industry-specific information from the most successful marketers and technology experts in the world. These Internet "influencers" create, learn and listen in a true community destination.

New and archived online business radio shows are now available in podcast format on WebmasterRadio.FM's re-designed Web site. To tune into WebmasterRadio.FM's live content, or to check out the show lineup, please visit www.webmasterradio.fm.

Media Contact:
Brandy Shapiro-Babin
303-882-5246

# # #
Press Releases for September 1, 2005

http://www.emediawire.com/releases/2005/9/emw279745.htm

Posted by Hans A. Koch at 11:26 AM | Comments (0)

September 01, 2005

First Movers Advantage Tells about his Click Fraud

We are hosting this section of the web site as a courtesy to advertisers who may also be using, or considering, pay per click (PPC) advertising for their own web sites. We have very good experience with some PPC networks and very bad experience with others. The comments below are based on our experience at www.myezmove.com We must stress that none of the networks listed here have engaged directly in click fraud on their own. Instead, some networks fail to address the issue and allow unscrupulous web publishers to engage in click fraud via their networks. Enhance:

We experienced click fraud from the start with this network. As a matter of fact, we could only find two possibly legitimate visitors from this source. Even then, the referring URLs were fakes, so we question the validity of those visitors. There are several illegitimate 'search engines' that carry ads from this network. These illegitimate sites engage in massive click fraud and Enhance fails to stop their fraudulent activity. Click here for more details on our experience with this PPC network. Our opinion: Stay away until Enhance cleans up its network.

ePilot:

We experienced click fraud from the start with this network. As a matter of fact, we could only find one possibly legitimate visitor from this source. There are several illegitimate 'search engines' that carry ads from this network. These illegitimate sites engage in massive click fraud and ePilot fails to stop their fraudulent activity. Click here for more details on our experience with this PPC network. Our opinion: Stay away until ePilot cleans up its network.

Google:

We are told that there may be a small percentage of fraudulent traffic coming through Google, but we have not been able to find any. We believe that Google is doing a good job of controlling click fraud. Our opinion: This is a high quality network.

Kanoodle:

We experienced click fraud from the start with this network. As a matter of fact, we could not find a single legitimate visitor from this source. There are several illegitimate 'search engines' that carry ads from this network. These illegitimate sites engage in massive click fraud and Kanoodle fails to stop their fraudulent activity. Click here for more details on our experience with this PPC network. Our opinion: Proceed with caution.

Follow-up: A representative from Kanoodle called to say that they wanted to keep my business and would work to make things right. He promised to change the traffic that was coming to my site. He was very friendly, so he will get that chance. We will post another follow-up after they make changes.

Follow-up (continued): Kanoodle gave me a credit for bad clicks and 'optimized' my account. I do not know what they did to 'optimize' the account, but we have the account in trial right now. We will post results as soon as we get them.

Lycos InSite:

 

We are not seeing any blatant click fraud from InSite. Of note, however, is that most of their traffic so far is referred to us by 'abcsearch', one of their network affiliates. This is interesting because we identified abcsearch as a possible fraud farm in other PPC networks. InSite appears to be able to filter out the fraudulent clicks from abcsearch -- the traffic we are getting appears to be legitimate. We will continue to monitor this network until we are convinced that the traffic is legitimate. Our Opinion: Proceed with caution.

Miva:

We are told that there may be a small percentage of fraudulent traffic coming through Miva, but we have not been able to find any. We believe that Miva is doing a good job of controlling click fraud. Our opinion: This is a high quality network.

Search123:

We experienced click fraud from the start with this network. As a matter of fact, we could not find a single legitimate visitor from this source. There are several illegitimate 'search engines' that carry ads from this network. These illegitimate sites engage in massive click fraud and Search123 fails to stop their fraudulent activity. Click here for more details on our experience with this PPC network. Our opinion: Stay away until Search123 cleans up its network.

•Yahoo!:

We are told that there may be a small percentage of fraudulent traffic coming through Yahoo!, but we have not been able to find any. We believe that Yahoo! is doing a good job of controlling click fraud. Our opinion: This is a high quality network.

http://www.firstmoversadvantage.com/click_fraud.php

Posted by Hans A. Koch at 07:29 PM | Comments (0)

Effective Pay-Per-Click Marketing

Combatting Click Fraud

by Mark J. Welch, Internet Marketing Consultant

Click here if you want to jump straight to the "fraud" analysis

September 1, 2005 (DRAFT) -- I'm going to share some strategies for "effective pay-per-click search marketing," including strategies for combatting "click fraud."

As marketers, we want a positive return on investment (ROI). Thus, if my client spends $1,000 on a "pay-per-click" (PPC) search campaign, she will want to generate more than $1,000 in gross profit as a result. In most cases, a campaign won't be sustained if the ROI is not positive.

Let's start by defining some key terms, and identifying some of the key players in this space:

  • "Pay-Per-Click" or PPC: An arrangement in which an advertiser agrees to pay a certain amount of money for each consumer who is sent to the advertiser's web site. A contract between the parties defines the exact situations in which compensation is due; for example, it may restrict the ways a consumer may be encouraged to click on an advertiser's link, and it may count only the first "click-through" from a specific consumer.

     

  • "PPC Search" is the term I will use to refer to a PPC arrangement in which the primary source of consumer clicks is through a general-interest "search engine" such as Google or Yahoo.

     

  • Yahoo Search Marketing (YSM) is the new name for Overture.com, which was earlier known as GoTo.com; this was the dominant company in this space in the early 1990's but is now a distant second to Google. Although Overture/GoTo offered its own search engine for consumers to use, most of its revenue came from ads placed through hundreds of other search engines.

     

  • Google AdWords is an automated advertising system in which advertisers may create text ads to appear alongside the search results for specific search phrases, on Google and partner search sites.

     

  • Google AdSense and Yahoo Publisher Network: These are essentially advertising networks which allow AdWords text advertisements to appear on "content" web sites; these ads are not associated with a specific search phrase used by a consumer, but instead Google's technology attempts to match ads to the site based on keyword analysis.

     

  • Other PPC Search Companies: In addition to YSM and AdWords, there are dozens of smaller companies which use the same general business model.

     

  • Click Fraud: Any activities which are designed to either (a) draw income from PPC search by creating the false appearance of an end-user search and click; or (b) deplete an advertiser's account through improper clicks, usually by a competitor.

     

  • "Idiot Click": I define this unique term to refer to a consumer's action in clicking on a paid advertisement simply because it is the first result shown for a particular search term, without actually reading the text of the ad to determine if it is relevant to the search.

Any discussion of "effective PPC marketing" or "click fraud" can quickly become incomprehensible, because of all the industry buzzwords and variations, so I'm going to just choose some arbitrary examples. Accounting concepts and terms may also be new to you, so I'm going to simplify everything as much as I can. For this discussion, let's assume that my company (All Widgets Inc.) sells widgets online, through a web site called AllWidgets.com; my largest competitor is "Best Widgets" (BestWidgets.com). Let's also assume that I sell widgets for $10 each, and that my cost for each widget is $3, plus I estimate that I'll have general "overhead" expenses that equal about $2 per widget. Thus, if someone comes to AllWidgets.com and buys a widget, I'll earn $5 "gross profit."

Currently, without any paid advertising, our web site is currently drawing 5,000 visitors each day, and draws 100 orders per day; the average order is for 2 widgets.

My job, as the Search Marketing Manager for AllWidgets.com, is to draw new customers to the AllWidgets web site to buy widgets. If I can profitably draw a lot of new sales, I will earn bonuses or commissions; if I don't, I'll be fired in disgrace. (One more thing: my boss says that my salary of $3,000 per month, plus my bonuses and commissions, will be counted as an expense against gross profit, so I am starting with a "handicap.")

 

Widgets - buy @ AllWidgets.com
Low prices, best quality, same-day
shipping; 100% guaranteed.
www.AllWidgets.com/

Starting Off: Widgets are cool, and people want them, and of course lots of people go to Google.com and search for a place to learn about and buy widgets. So I'm going to start by signing up for Google's AdWords program, and creating a text ad to sell widgets. I've decided that if someone searches for "widget" or "widgets" on Google.com, I want my text ad to appear; a sample ad is shown at right. So I fill in Google's forms to request that my text ad appear any time someone searches for "widget" or "widgets."

 

Danger: The first mistake I might make is to accept Google's "recommendation" for a maximum bid amount for my search term. For example, Google might recommend that I choose "$1.18" as my maximum bid, because there are other bidders who've chosen maximum bids of more than $1 per click.

Sorry, Google, but this "recommendation" doesn't pass the "smell test" for me. I already know that my site draws 5,000 visitors per day, but only 100 orders, so only 1 of every 50 visitors will place an order. I also know that my average order is for 2 widgets, so my gross profit per order is only $10. If my gross profit from 50 visitors is $10, then I should spend no more than 20 cents per click (.20 x 50 = $10).

Since I don't know whether Google's users will buy at the same rates as my current customers, I'll try a maximum bid of just 11 cents per click.

Another Mistake: Did you notice my other mistake? I only bid on two search words: "widget" and "widgets." But there are many other search words and phrases that may bring more qualified people to my site. For example, how about "buy widget" or "bulk widgets" or "case lot of widgets"? If people use widgets to repair their fromitzes, then I should consider bidding on "fromitz" or "repair fromitz" as well. There are probably thousands of potential search terms to consider.

Anyway, let's keep going: let's run the campaign for a while. Google lets me set a daily "budget" for my campaigns, and usually recommends an amount; Google's traffic estimator also tells me how often people search for this phrase, and let's assume that there are 100,000 searches per month for "widget" and "widgets." I'll arbitrarily choose a budget of $50 per day.

Tracking Code: Oh, yes, one other very important thing: I ask our company's webmaster to implement a "tracking code" so that we can trace the source of each new order. Thus, my text ad doesn't just link to the home page, but also includes a tracking code, like this: http://www.AllWidgets.com/index.htm?source=AdWords+widget. Then, if someone clicks from Google to my site, and then places an order, that tracking code ("Adwords+widget") will be associated with the order.

So there we go. I launch this campaign, and the very next day I'm pleased to discover that 100 people clicked on my ad, at an average cost of seven cents per click (total cost: $7 for the first day). I run a sales report, and discover that three people placed orders, for a total of 6 widgets. My gross profit was $30 but my cost was only $7, so I'd call that a success.

Beyond Google AdWords: Now it's time to expand my campaign: maybe I could increase the maximum bid amount, or add more keyword phrases, or maybe it's time to expand my campaign to other search engines.

Gosh, this PPC search thing is amazing. I go ahead and sign up for "another PPC search engine." I don't want to single any company out, so I'll call the company "GleepSearch.com" (which is an unregistered domain as of August 2, 2005).

I'm feeling confident (maybe a little bit cocky), I use the exact same text ad, and the same same bid amount, and then I go home for the weekend.

On Monday morning, I check the results. On Google AdWords, I've spent a total of $35, which drove sales of 18 widgets. On GleepSearch.com, I've spent $28, but no sales.

For some reason, I do nothing else, and two weeks later, I've spent $380 on AdWords to sell 155 widgets, but I've spent $350 on GleepSearch.com to sell just 5 widgets.

The final result of the first two weeks of PPC search marketing: I've spent $730 to drive sales of 160 widgets, which yield a gross profit of $800. Maybe I won't get fired (yet), but these are not promising results.

How to Improve Results: The obvious thing to do is to end the campaign at GleepSearch.com, and stick with Google AdWords. That will cut expenses almost in half, while losing only a few sales. But if I stop there, I'm probably never going to find a way to justify my salary.

But I can't fix anything unless I know what's broken. So I ask my company's technical team to find some data for me, and I probably request access to the web server "log files," and I use a web log analysis program to generate some reports.

I make an amazing discovery: I specified only two search phrases ("widget" and "widgets") but my web logs show that Google and GleepSearch.com have both sent me many people who searched for longer phrases, like "widget repair" and "free widgets." When I look to see who placed orders, I discover that most people who actually bought widgets from AllWidgets did not search for "widget" or "widgets." Instead, they searched for "cheap widgets," "widgets fast," "fromitz widgets," and one customer had actually searched for "Best Widgets." (Recall that my biggest competitor is BestWidgets.com).

Suspicious & Strange Data: As I review my log analysis results (perhaps from WebTrends or another program), something else confuses me: when people came to AllWidgets.com from Google, they viewed an average of 1.6 web pages and 5.6 graphics files per visit (there are 4 images on the home page), but people who came from GleepSearch.com viewed an average of 1.1 web pages and 3.3 graphics files per visit. In fact, it appears that there are hundreds of visitors who clicked from GleepSearch.com and loaded the main HTML home page, but their web browsers never "requested" any of the graphics on that page!

I also notice that the "referrer" fields for many of these paid searches show a different web site, other than Google.com or GleepSearch.com. There are searches from AOL and other search sites that partner with Google, but there are also search engines I've never heard of. I also discover that the "referrer" field is blank much more often for paid search traffic than for other sources of traffic to my web site, and that GleepSearch has many more "blank referrers" than Google.

Something else is odd: my web site's traffic is strongest during the business day, so that my reports have a "curve" that rises from 8 am to 1pm and then slides down from 2pm to 7pm, with almost no traffic from 1 to 3 am. But when I view the traffic from GleepSearch.com, the curve is much "softer" and "flatter," and nearly all the traffic between 1 and 3 am is coming from that one source.

Finally, I notice another strange phenomenon: the same strange searches seem to be repeated on GleepSearch.com multiple times. For example, the search phrases "repiar widgets" and "widget frobishko" both appear three times each in referrer strings from GleepSearch.com, but never from any other source.

While I'm trying to figure out what's wrong with my campaigns, I search on Google and elsewhere to find answers, and immediately I discover a phrase called "click fraud," and there are claims on several web sites that GleepSearch.com is plagued by fraudulent activity. When I call the company, they acknowledge that in the past, some criminals have tried to abuse their partners by generating fraudulent traffic, but the company has complex systems in place to detect fraud, and my account traffic is unaffected.

 

What Can I Do? In the examples above, I've tried to identify some of the most common "inefficiences" that I've uncovered while analyzing PPC search campaigns. Now, I'll offer some strategies to combat both fraud and inefficiencies in PPC search campaigns.

 

  1. Choose Keywords and Phrases Carefully:

     

    • More Specific: A more specific search phrase is usually more likely to result in a sale. Thus, people who come to your web site after searching for "buy widgets" are much more likely to buy your widgets, than people who searched for "widgets."

       

    • Avoid "Bad Searches": The most obvious "bad keyword" is "free." People who search for "free widgets" are probably not planning to spend money on widgets. Words like "cheap" or "discount" are qualifiers that may be wonderful for discount resellers, but awful for other merchants.

       

    • Change Your Bid Amounts and Tracking Codes: You will find that some search phrases are worth more than others. In most cases, you won't want to spend any amount on "free widgets" but you might be willing to pay a huge premium to present your ad to people who search for "widgets next day." You can learn that faster by using a unique tracking code for each search phrase. Let me repeat that: use a unique tracking code for each search phrase!

       

    • Echo the Search Phrase: You should also use a unique ad for each small group of search phrases; your ad headline and text should "echo" the search phrase. Not only does this improve clickthroughs, it will reduce the "minimum bid amount" demanded by Google's AdWords system (this is a new effect of the changes Google made to AdWords in late August 2005).

     

  2. Watch for Pattern Variations: Inefficient (and fraudulent) search traffic can often be quickly detected by looking for "different behavior."

       

    • Abandonment: Every web site has visitors who come to the home page, but then "abandon" the site to go somewhere else. Watch for significant variations in this rate by source.

       

    • Path Analysis: On most web sites, there are "busy" and "unpopular" sections. For example, very few people read a web site's "privacy policy" or "about us" page, but many more people will click to view "closeouts" and "today's special." Most visitors view only one or a few pages at your site (hence an average visit of 1.7 pages is not bad), and very few view 10 or more pages during a session. If you discover that visitors from a particular source have a dramatically different pattern of activity, you need to pay attention.

       

    • Double-Click Activity: It is fairly common for a consumer to search for something at Google, visit an advertiser's web site, and then search again at Google and click again to the same advertiser's site a few minutes later. This is a normal pattern of activity for someone who is "shopping around" or comparing prices, and it's not unreasonable to pay two "per-click" fees for this. However, if two clicks come from the same visitor within a few seconds, there should be no charge for the second click, nor should there be any charge for a third or subsequent click.

       

    • "Echo" Activity: If you discover a consistent pattern in which the same search phrases are executed more often than "normal," or in which multiple users follow the same unusual path through your site, it is possible that the "echoed" activity is from an automated "agent." (This is one use for data from "spyware," which installs itself uninvited on consumers' computers, and records their keystrokes or web visits; the data can be sent to another computer where the same searches and clicks are repeated.)

       

    • Phrase Surges: Unsophisticated "click fraud" operations will flood a search engine with many requests for the same search term. For example, I might discover that normally, 10% of my traffic from search engines is associated with a search for "fromitz," but then suddenly there is a huge surge in traffic through GleepSearch.com, of which 90% are searches for "fromitz." Sometimes there are valid reasons -- maybe Jay Leno made a joke about fromitzes and widgets -- but often this is a sign of fraud.

       

    • Missing Data: Often, an increased rate of "missing data" (such as user-agent or referrer data) may reflect fraudulent activity.

       

    • Excess Foreign Traffic: In one case where I uncovered "click fraud, more than one-third were from IP addresses in China, and 56% were from IP addresses in non-English-speaking countries. Only 44% of traffic came from English-speaking countries. This is an extraordinary pattern, when compared to typical traffic distributions.

     

  3. Demand Genuine Cooperation from the Search Partner: Google's "AdWords" staff and the staff of other PPC search systems have a duty to pro-actively monitor search activity and flag suspicious traffic. In most cases, they should delete fraudulent activity from all client accounts without any request. However, it turns out that some PPC companies are more honest than others.

       

    • Several years ago, I discovered fraudulent activity by "partners of a partner of a PPC search company." In other words, I paid company "E" for PPC search traffic, and they in turn paid company "F," which operated its own search engine, and company "F" in turn paid company "G" and dozens of other small search engines for traffic. I discovered that company "G" was generating immense volumes of fraudulent traffic, and so I called Company "E" to ask them to take action. Eventually, they disclosed that company "F" was involved. When I spoke with company "F", they told me that they had discovered the fraud, cancelled their contract with company "G", and credited all activity back to company "E" -- in other words, they had already told company "E" that the traffic was fraudulent and paid them back for it. However, company "E" refused to reimburse me for this traffic, claiming that there was no proof that it was fraudulent -- even after I gave them log files showing the inexplicable activity.

       

    • Work with legitimate PPC companies to analyze fraud: When dealing with a PPC company like Google AdWords or Yahoo Internet Marketing (Overture), before complaining to the company, you should check to see if you were even charged for the "fraudulent" activity. For example, you may discover 50 legitimate and 500 fraudulent clickthroughs to your server, but Google charged you for 50 clicks, so they have already detected and erased the fraudulent charges from your account. If Google has charged you for the fraudulent activity, be prepared to send them log files for all the activity in question, and insist that the data be given to someone in their "fraud detection" team. (You do not need to hand over your complete log files, which contain valuable proprietary data -- I generally use Microsoft Excel or Access to extract data only for the IP addresses that generated fraudulent activity, along with log entries for ALL inbound Google clicks.)

       

    • Be prepared to "pull the plug" on any PPC company that won't cooperate: If you encounter substantial suspicious activity in your campaigns with a PPC search system, and the company does not cooperate in a meaningful way, you need to quickly terminate your campaigns with that company. How the company reacts will tell you a lot: when I cancelled my campaigns with company "E," above, the company simply accepted it without question -- they knew I had "caught" them and they just moved on to other victims. In contrast, whenever I suspend my campaigns on Google's AdWords system, the company immediately asks why, and seeks to identify and remove any obstacles to the continuation of our relationship.

 

This article was written by Mark J. Welch, Internet Marketing Consultant

Posted by Hans A. Koch at 03:32 PM | Comments (0)