Click Fraud Report: Click Fraud Articles Archives

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September 27, 2006

Click fraud growing on the Web

A year ago, DiamondHarmony.com, an online jewelry store, decided that it had outgrown its sole source of advertising, which was eBay.

The company added an elaborate marketing effort on search engines that included a pay-per-click advertising campaign based on keywords and phrases. For its trouble, DiamondHarmonyDiamondHarmony became ensnared in click fraud.

Instead of actual prospects, the clicks were coming from fraudulent sources. The fraud, which cost DiamondHarmony $17,000 over seven months, was uncovered through analytical software the company installed from ClickTracks of Santa Cruz, Calif.

Posted by dj at 11:51 AM | Comments (0)

September 01, 2006

Google CEO clicks ads 'all the time,' are his clicks marked 'invalid'?

Google CEO Eric Schmidt recently revealed that he clicks on Google ads "all the time." Asked at the Search Engine Strategies Conference earlier this month "When was the last time you clicked on an ad, and why, at Google?" Schmidt acknowledged:

I do it all the time, probably because I want to make sure that everything was working.

Are such evaluation clicks by the Google CEO registered by Google as "invalid clicks" and filtered out before advertisers are billed? Or, are Google advertisers charged for a click each time Schmidt clicks on a Google ad under the guise of making sure that "everything was working?"

Posted by dj at 10:00 AM | Comments (0)

August 05, 2006

Click Fraud Threatens Web

The Federal Trade Commission believes that no place is more fraud-friendly than the web. The agency estimates that more than one in 10 Americans (perhaps as many as 30 million people in this country) have fallen victim to fraud. Last year, internet-related fraud complaints surpassed all others, comprising 55 percent of all digital malfeasance, and for the first time the net supplanted the telephone as the most popular initial point of contact for dupers to meet dupees.

An almost endless array of clever schemes exists to separate consumers from their money. There are cross-border scams that consist of fake foreign lotteries, phony prize promotions, advance-fee loan cons and the infamous Nigerian scam. Charity scams take advantage of consumers' generosity while so-called home-opportunity scams zero in on people looking for an easy way to make a few extra bucks. Identity thieves "phish" for personal information, like account numbers and PINs, which they use to sink your good credit (while sucking every penny out of your bank account). Pop-up spammers rely on nefarious methods to secretly wrest control of your PC desktop so they can pummel you with ads. Auction fraud accounts for half of the complaints the agency receives.

How Click Fraud could swallow the Internet

Stuart Cauff launched a charter-jet service in Miami Beach back in 2002. Being a 21st-century business, JetNetwork advertised on the Internet, especially on search engines. Anyone who Googled, say, "air charter Miami" would be greeted with the familiar list of search results and, in a separate place, a plain box of text with a blue hyperlink to JetNetwork's Web site.

Posted by dj at 11:39 PM | Comments (0)

Exposing Click Fraud

Internet marketers facing higher advertising fees on search networks are becoming increasingly concerned about a form of online fraud that was thought to have been contained years ago.

The practice, known as "click fraud," began in the early days of the Internet's mainstream popularity with programs that automatically surfed Web sites to increase traffic figures. This led companies to develop policing technologies touted as antidotes to the problem. But some marketing executives estimate that up to 20 percent of fees in certain advertising categories continue to be based on nonexistent consumers in today's search industry.

Posted by dj at 11:38 PM | Comments (0)

April 13, 2006

In Game of Click and Mouse, Advertisers Come Up Empty

Radiator.com got a jolt this month from the firm it hired to audit the nearly $40,000 worth of sponsored links it buys every month from Google and Yahoo.

It appears that many of the clicks on the Web site's search-engine ads were made not by potential customers but instead by automated programs or people trying to drive up Radiator's advertising bill. Like other advertisers that place links on search engines, Radiator.com pays only when people click on the links.

After analyzing where and when each click came from, auditing firm ClickFacts Inc. estimated that 35 percent of the referrals that Radiator paid Google for stemmed from bogus traffic. Likewise, 17 percent of the leads that came from Yahoo search results were illegitimate.

Posted by dj at 08:10 AM | Comments (0)

December 16, 2005

As much as 29.5 percent PPC fraud

Get Your Clicks

Entrepreneur.com's recent article discusses what needs to be done to help identify click fraud.....monitor, track, report, monitor....

Posted by dj at 03:23 PM | 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)

September 01, 2005

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.

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).
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.
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)

August 31, 2005

Is Google serious about click fraud?

Over at Got Ads? blog they mention using Google AdSense and noticing Click Fraud happening at their own site. He questions why there is not more of an obvious way to report what is going on. Should they be afraid of doing the right thing by reporting to google, and if they do report will he get banned and lose the revenue that has built up in his account?

I think there's click fraud happening here." However, I can't find any place on the AdSense publisher UI that says how to report it.

Posted by Hans A. Koch at 05:15 PM | Comments (0)

August 29, 2005

AdWords click quality defined - FROM GOOGLE

How does Google detect invalid clicks?

Google's proprietary technology analyzes clicks to determine whether they fit a pattern of use intended to artificially drive up an advertiser's clicks or a publisher's earnings. Our system automatically identifies most clicks generated by unethical users and automated robots, and filters out these clicks before they ever reach your reports. Google has three powerful tools for protecting your clicks:

Detection and filtering techniques: Each click on an AdWords ad is examined by our system. Google looks at numerous data points for each click, including the IP address, the time of the click, any duplicate clicks, and various other click patterns. Our system then analyzes these factors to isolate and filter out clicks deemed invalid.

Advanced monitoring techniques: Google uses a number of unique and innovative techniques for managing invalid click activity that surpass the standard methods. We can't disclose details about the software, except to say that our team of pioneering experts is constantly working to expand and improve our technology in order to stay ahead of changing trends in invalid click techniques.

Human expertise: In addition to our automated click protection techniques, we have a team of human experts who use specialized tools and techniques to examine individual instances of invalid clicks. This team is a key component of our strategy to expose, monitor and track invalid click activity, ensuring a high level of click quality. When our system detects invalid clicks, a click protection expert examines the affected account to glean important data about the source of the invalid clicks.

Learn more about invalid clicks here.

Does high click volume mean that I'm getting invalid clicks?

There are valid reasons for an ad to receive multiple clicks from a single source. The following are some possible scenarios:

* Individual users may legitimately click on your ad more than one time when comparison shopping or returning to your site for more information.
* An Internet provider may assign identical IP addresses to multiple users by geographic area.
* You may see an increase in traffic if your ads have recently been approved to run on search and content sites and products in the Google Network, if you recently opted in to the Google Network, or if new sites for which your ads are relevant join our content network.
* Click traffic may vary due to seasonal interests or current events. For example, fluctuations due to seasonal promotions or special sales are common, and keywords popular at particular times of the year will also experience a higher click volume regardless of whether you have made proactive seasonal changes to your account content.

These scenarios all represent legitimate users accessing your advertisement in expected ways. If you are uncomfortable with the increased click volume, we recommend optimizing your campaign.

How do I report suspected invalid clicks?

While we're constantly working to improve our invalid click detection capabilities, we can combat the problem best by working together. We encourage you to contact us if you believe you have been affected by invalid clicks.

We have a team of experts who investigate invalid click activity on a case-by-case basis. Including some or all of the following information may help expedite their time-intensive investigation:

1. The campaign(s), Ad Group(s), and/or keyword(s) associated with the suspicious clicks.
2. The date(s) and time(s) of the suspicious click activity.
3. Any data in your weblogs or reports that indicate suspicious IP addresses, referrers, or requests.
4. A paragraph describing the trends in logs and/or reports that led you to believe the click activity is invalid.

The verification and research process can be time consuming, and we appreciate your patience while our investigation team reviews your account. Please allow 3-5 business days for us to respond. If you have any additional information, please be sure to let us know so we can include it in our review.

To learn more about our click protection strategies, click here.

To learn how Google deals with invalid click activity, click here.

What does Google do when invalid clicks are detected?

Google actively implements several click protection techniques in order to combat invalid click activity. Clicks that Google determines invalid are automatically filtered from your reports. In addition, we apply the following policies for the protection of AdWords advertisers:

* If our experts find that invalid clicks have escaped automatic detection, you'll receive a credit for those clicks. This credit will appear as an Adjustment on the Billing Summary page of the 'My Account' section in your AdWords account. (Other types of credits, such as promotional credits and overdelivery credits, may also be labeled Adjustment.)
* Any advertiser or publisher participating in invalid click activity or any related offense is subject to legal prosecution. We will also take the appropriate action on the related account.

If you believe your account reports reflect click activity that is more extreme than ordinary user behavior or that exhibits strange patterns, please click here for more information and instructions.

Other Sources of Clicks

If you notice click activity that doesn't fit your usual patterns, please keep in mind the following possible explanations:

These scenarios all represent legitimate users accessing your advertisement in expected ways.

For more information about our click monitoring system, please visit our Click Quality FAQ.

What kinds of clicks does Google consider invalid?

Some sources of invalid clicks include:

* Manual clicks intended to increase your advertising costs or to increase profits for website owners hosting your ads.
* Clicks by automated tools, robots, or other deceptive software.

We closely monitor these and other scenarios to better protect you from receiving invalid clicks. To learn more about what we do to combat invalid clicks, please click here.

What can I do to help monitor or prevent invalid clicks on my ad?

You might consider using tracking URLs to monitor click activity on your ads. Tracking URLs make it possible to accurately identify all the traffic that comes from Google (or other sources) to your website. Once you know the sources of your clicks, you can track which keywords generate sales and give you the best return on investment.

To take advantage of tracking URLs, just place a parameter at the end of your URL. For example, if your URL is www.yourdomain.com, your tracking URL would be www.yourdomain.com/?referrer=Google.

It's important to test each new tracking URL in your own web browser to verify that it's linking properly to its specified page. If you find that a tracking URL isn't linking properly, you might want to eliminate the forward slash after the domain. For example, instead of www.yourdomain.com/?referrer=Google, try using www.yourdomain.com?referrer=Google.

Once you've created your tracking URLs, you can look at your web server logs or third party tracking software to get traffic data for your ads.

Web server logs provide electronic recordings of where your website traffic originates. To open the log file in your Web server software, use a text editor such as Notepad. This log file has an entry for each click to your site. To see how many clicks come from a particular source, just count the entries where the source (such as 'Google' or Google Network sites and products) appears in the referring URL.

What else can I do?

If you believe your account reports reflect click activity that is more extreme than ordinary user behavior or that exhibits strange patterns, please let us know.

Why might my website logs show different click patterns than what Google reports?

You might see a discrepancy between your weblogs and the reports in your account. If your weblogs show more clicks than your reports, keep in mind that our proprietary click protection technology filters out most invalid clicks before they ever reach your reports. To maintain the integrity of our advertising program, we work to make sure you're being billed for legitimate clicks on your ads.

If your weblogs show fewer clicks than your account reports, this discrepancy occurs when clicks to your ad are not detected by your web tracking software. The information below should help you reconcile your weblogs to the statistics reported within your account.

How our system works

Since our results pages host your ads, we are able to detect and record all types of clicks to your ad. If you are looking for more accurate reports than your current web tracking system, many users have found that the weblogs from their server are more reliable for comparisons with our reports.

Additionally, Google's reporting technology can record clicks that other web tracking programs may miss. Some tracking programs may not register clicks that occur while the destination site is down, or they may have limitations on the kinds and sources of clicks they detect.

Reconcile your weblogs

The following variables are the most common for those advertisers concerned about a discrepancy between their reporting statistics versus those reported via Google AdWords:

* Google Network statistics: Google displays ads on a growing network of search and content sites and products. Typically, Web tracking software is not able to recognize clicks from the Google Network as being Google's clicks. These are generally labeled with the third party site name, not as clicks from Google. If your ads are currently, or have ever been, distributed to the Google Network such as About.com, AOL, and Netscape, we recommend you visit our Google Network FAQ to determine whether some of the referrers to your site were from the Google Network.
* Time discrepancies: Time discrepancies between different tracking programs can throw off click estimates. Be sure to compare the appropriate time periods. All of our reports are accumulated on U.S. Pacific Standard Time (08:00 Greenwich Mean Time). To ensure the highest level of accuracy, there is a delay between the moment when a user actually clicks on your ad and when that click is reported as a statistic within your account. This delay represents the time required to evaluate and report the click as a valid one.
* IP selection: Your system may filter out visits from your IP address; however, AdWords does not. Also, if you currently use a shared ISP provider (such as AOL or EarthLink), you may be sharing one or more IP addresses with other users. Therefore, multiple clicks from the same IP address could be legitimate clicks from multiple users; each one would be reported as an individual, valid click within your account.

How will Google credit my account for invalid clicks?

Google constantly monitors for, and strictly prohibits, invalid click activity. We work hard to maintain the integrity of our advertising program and to make sure you're being billed for legitimate clicks on your ads. If we discover that you've been charged for invalid clicks in the past two months, we'll apply credits to your account.

You'll find any credits, including credits for invalid clicks, in your billing summary as a line item labeled Adjustment. Please note that other types of credits, such as promotional credits, may also fall under the Adjustment line item.

Will my reporting be affected by invalid clicks?

Our proprietary click protection technology filters out most invalid clicks before they ever reach your reports. To maintain the integrity of our advertising program, we work to make sure you're being billed for legitimate clicks on your ads.

However, if you feel that your account reports reflect invalid clicks, please let us know by following the steps listed here.

Please note that by creating an AdWords account, advertisers agree to accept the Google AdWords reporting system and reported metrics as provided via the AdWords program Terms and Conditions. We rely on our own servers' weblogs to supply the most accurate site traffic data to include in your reports. Similarly, we rely on our data to determine whether or not a credit for invalid clicks is due. If we discover that you've been charged for invalid clicks in the past two months, we'll issue an appropriate credit, but we're unable to retroactively change reports.

https://adwords.google.com/support/bin/topic.py?topic=35

Posted by Hans A. Koch at 09:11 PM | Comments (0)

August 24, 2005

Click Fraud is Growing

Once again I turn to the topic of click fraud - you know, clicking on AdSense advertisements simply to either add up your numbers (ie: make money) or disrupt your competitors (make them lose money).

Experts, as reported in Inc.com, say that 20% to 35% of all clicks are bogus.

Okay, so lets look at it from the advertisers point of view, more so if you are a small business (ie: your marketing budget is stretched), paying for these bogus click-throughs.

I like Inc.com’s view of click fraud:

It’s as if thousands of people are charging you for window-shopping

Click Fraud is a real growing problem that needs to be addressed sooner rather than later by the folks over at Google … right or wrong: their reputation is at stake!

I’ve even heard stories of advertisers being too scared to complain for fear of being blacklisted by the search giant. I hope this is not true.

Further info about click fraud that might be of interest …

A quick primer on What is Click Fraud from About.com

In July, C/Net News.com wrote about it in Exposing Click Fraud.

Popular online forum, SitePoint, has an on-going thread about being banned from AdSense - AdSense Banned Me Today. Another post at the forum - Invalid Clicks on Google Adsense - Help! goes further into fears some publishers have.

feedbuzzard even points me to a WebProNews article on the issue.

I even wrote a small post about it back in June.

There has also been a flourishing industry developing over click fraud and services helping to combat it … ClickDefense.com, ClickDetective, ValidClick.com … to name but a few.

Can you see a trend in all of this?

August 24th, 2005
http://www.homeofficevoice.com/2005/08/24/click-fraud-is-growing/

Posted by Hans A. Koch at 09:00 AM | Comments (0)

Google Adwords and PPC fraud revealed

Your probably reading this article because you use Google Adwords to bring traffic to your website, or your a click fraudster yourself, wanting to see what kind of information I have for you. Most of you click fraudsters will think that I have no idea what I am talking about, and that I do not know your methods. Well, trust me buddy, I KNOW ALL ABOUT YOU AND WHAT YOU DO.

If you are new to the click fraud scene, here is an example:

1. Scumbag puts Google Adsense ads on his website.

2. The scumbag then proceeds to cheat Google Adsense by creating false clickthroughs and impressions, in return earning him a pretty nice profit, because he isn't even working on his website, just generating false traffic.

All of you people that run campaigns through Google Adwords are thinking, "This guy has no idea what he is talking about, Google has everything under control and they even state so publicly!"

WOW! What kind of pay per click company would admit that they DO NOT have click fraud under control? I wonder what would happen to their business immediately following that statement.

Estimates say that nearly 20% of all clicks for Adsense are illegitimate. In my honest opinion I believe this number to be around 30-35% from some of the things I have seen.

Alrite, now the big question, how are they doing it?

There are a number of ways that people are cheating, including the 'click groups' from India that click on your ads for you and create big pay checks as long as you pay them their $0.50 an hour so they can buy bread for their family.

But I'm going to show you the technical way that Google Adsense is cheated, not poor people clicking ads. I'm talking about extremely smart programmers that create hitbots to cheat Adsense. And, NO, I'm not talking about that piece of garbage 'CACA' or Clicking Agent that you find on Google. I am talking about PRIVATE programs and
scripts that are only used by private groups.

How do these scripts get away undetected you ask?

Simple, let's actually take a look at Google's click fraud protection (This is what I have summed up, I seriously don't believe they have anything other protection because people are still cheating using these methods as you read this article.)

If you actually take a look at Google's Adsense code when it is on your webpage you will find the URL that is used to retrieve ads. (Right-Clck your ad Iframe and click 'View Page Information' or something similar.)

Here is an example of the URL that you will find:

http://pagead2.googlesyndication.co...240&u_java=true

Now let's decode this up a little bit, shall we?

client=ca-pub-2521202633232871 - Your client code, this tells Google who to assign the click-through money to.

dt=1124847235453 - Javascript, if you use the command google_date = new Date(); document.write(google_date.getTime()) --- Which generates 1124847235453.

This shows you the number of milliseconds since midnite January 1, 1970. This is what seems to be Google's biggest automated proxy clicker fraud prevention. Doesn't seem too hard to generate with 2 lines of code now does it?

lmt=1124631699 - The last time your webpage was updated. LMT stands for Last Modified Time, pretty easy Javascript to generate this one too - document.write(document.lastModified);
--- Which generates 1124631699.

(Notice I'm skipping a bunch, that's because they are just showing the type of ad, colors, and size that you are using.)

cc=59 - Seems to be some random number based on the screen width, height, and color scheme. I've seen this number go from 20 all the way up to 400. I'm sure they don't use this to reliably track click fraud.

u_h=768 - Height of your screen settings.

u_w=1024 - Width of your screen settings.

u_ah=738 - Your available screen height.

u_aw=1024 - Your available screen width.

u_cd=32 - Color scheme on windows, e.g. 32-bit.

u_tz=-240 - Your monitor refresh rate or something else that isn't important, I've never seen it not -240.

u_java=true - Just seeing if you have java enabled.

There are some other variables that are sometimes in the URL such as 'u_his=' this means how many pages you have visited since you started up your browser. There's also some MIME type checks and how many plugins you have installed, but these variables come up very rarely. I think they are only meant for Netscape/Firefox browsers.

Now that we have 'decoded' the supposed unbeatable Google Adsense code, what do you think about click fraud? You still think it is rare?

After randomizing all the data and sending an automated query to their Adsense URL, all the scumbag has to do is parse out all of Google's click URL's and click one of them, giving him a click through. This can all be easily faked with even a Visual Basic program. A newbie programmer could in-fact cheat Google Adsense without much knowledge.

Alrite you say, they beat the javascript code detection but doesn't Google use cookies so they can't do this?

No, Google does not use cookies for Adsense.

Well what about IP-tracking? Someone can't have that many proxies!

There are click groups that leave these programs running on their computer. They each randomly click each other's URL's automatically. The person running the program doesn't even have to do anything, but he is still contributing to the success of their group and himself.

Does that sound too far-fetched? I am telling you that there are click groups that do this now and have been since the old Linkshare PPC days in 1999. Yes, if you were an advertiser on Linkshare back around 1999-2002, you got RAPED.

And that isn't all. I have read on the internet that there is currently over 100,000 people infected in the United States alone with trojan proxy servers. These proxy servers run on random ports so that Google can't just do a simple port 8080 or 80 check on it to see if it's a proxy. The majority of these proxy servers are used
for credit card fraud, but a lot of them are also used to cheat Google Adsense and other pay per click programs. These proxies are at-home users that look like normal dial-up, cable, and dsl users from all across the world, but mainly United States.

There is NO WAY to prove that they are a proxy.

Random User-Agent strings is another tactic that is often used by click fraudsters. This makes Google think that a lot of different browsers are clicking the links, just keeping them further from finding out the truth.

On a side note, you may be thinking that the new Yahoo! pay per click program may be the way to go. I checked into their protection and guess what? They are only using ONE of Google's protections and that is the Javascript GetTime. They are still in Beta though and this may change, but who knows?

To the cheaters: The benefits of cheating are short. Eventually you will be caught for what you are doing and maybe even sued by Google. There is a ton of money to be made legally with Adsense and I suggest that you stop cheating. Who am I to tell you to stop? I use to be one of you! Back when I was 13-14 I was making programs like the ones you guys are using now. You guys probably used one of my programs at one time. I am happy to say that those days of mine are all in the past now, and I am making a good amount of money LEGALLY with Adsense and other affiliate programs. Work hard guys and you will reap the benefits 100 times what you make cheating.

To the advertisers: You people that use Google Adwords now see that it is actually not very hard to cheat you out of your money, so be careful and MAKE SURE that you use a click fraud protection script such as ClickDefense. To lower most of your click fraud, just don't put your ads in the Content Network, only stay on Google's sponsored search results. Only Google gets paid when someone clicks the search results sponsored ads and nobody wants to cheat to make Google anymore money do they? Check the stock, it's currently at 279.58 a share.

To summarize my article I just want to state that no one should use this information for cheating Adsense and I am not responsible for your actions if you choose to do so. You will be caught because Google will evolve and get smarter, eventually.

Joseph Tierney is the owner of Auction Fraud Protection - http://www.stopauctionfraud.com A user-generated database of auction fraudsters. He is 2005 high school graduate and is currently studying for a computer science degree in college.

http://www.casinoaffiliateprograms.com/bb/google-adwords-and-ppc-fraud-revealed.7188.html

Posted by Hans A. Koch at 07:56 AM | Comments (0)

August 23, 2005

Google sued over 'click fraud' in Adwords

On June 24, 2005, a lawsuit was filed against Google for alleged click fraud on the Adwords pay-per-click program. The Plaintiff, Click Defense, claims Google failed to enact appropriate measures to guard against fraudulent clicks resulting in unwarranted marketing fees. Click Defense claims it has lost over $5 million to click fraud.

Click Fraud

“Click fraud” is a term with a unique meaning on the Internet. It refers to the deliberate clicking of pay-per-click advertisements by users that have no intent of actually making a purchase. It is common knowledge that unethical companies will set up click centers oversees where individuals are paid nominal wages to click on certain ads. Alternatively, companies will use programs called “click bots” that automatically search out ads and do the same thing. The end result, of course, is a bevy of clicks that drain advertising budgets.

Google claims it takes appropriate precautionary measures. This claim, however, is often met with a snicker since the sole source of revenues for Google is advertising. This causes an inherent conflict of interest since Google needs to maximize clicks to generate revenues. As a publicly traded company, Google is under pressure to continually show increased profits. Taking all of this into account, one must wonder how hard Google works to limit fraudulent clicks. If you have used the “content search” aspect of Google Adwords, the incredible poor conversion rates certainly must raise doubts in your mind.

Click Fraud Percentages

Neither Google, Overture nor any other search engine has been willing to publish click fraud rates for their paid advertising program. Hints have been provided regarding a rate of 20 percent. Active advertisers know, however, the percentages can be much higher depending on the competitiveness of the keywords in question. Click Defense, the Plaintiff in the lawsuit, is claiming a click fraud rate of 38 percent.

Will This Impact PPC?

The lawsuit against Google was inevitable. Every site using Adwords is aware of the problem with click fraud. Frankly, it is a problem with every pay-per-click search engine although our experience has been better with Overture.

So, will this lawsuit force the search engines to clean up their act? It’s hard to say, but there should be one definite benefit. As part of the lawsuit, Google may be forced to reveal the true click fraud percentages occurring in Adwords. If Google moves to quickly settle the case, you should take it as an indication it wants to keep the rates confidential. This, of course, will mean the click fraud percentages are high.

You should watch the progress of this lawsuit if you use pay-per-click search engines to promote your site. Some very interesting information should be revealed. Regardless of the outcome, click fraud is just another reason to pursue search engine optimization strategies.
Halstatt

http://www.marketingtitan.com/google_click_fraud

Posted by Hans A. Koch at 10:37 PM | Comments (0)

A New Keyword Advertising Model: An Interview with Mel Strocen of Jayde Online

The Independent Search Engine and Directory Network (ISEDN), founded in June 2005, is an alliance of approximately 48 niche search engines and directories. The innovative feature of the ISEDN is that members have agreed to use a new “hybrid paid inclusion” advertising model that charges advertisers a flat fee in exchange for displaying their ads across the entire ISEDN for the keywords they purchase, rather than use the standard pay-per-click advertising model. Recently, I chatted with Mel Strocen, the founder of the ISEDN, to discuss the network.

Scott Buresh (SB): Before we get into the ISEDN, please tell us a bit about your background, and about the history of your company, Jayde Online.

Mel Strocen (MS): Jayde Online was named after the first website I launched in 1996, Jayde.com, a search engine and web directory which was initially little more than a hobby site. As traffic and interest in the site grew, it began to take up more and more of my time. In 1999, I quit my full-time job which was totally unrelated to the Net and partnered with a newsletter publisher in Kentucky to co-found the iEntry newsletter network.

Two years later I sold my interest in iEntry and began to build the Jayde Online Network of websites which now number 20 web properties.

Back then, I had some fairly fixed ideas as to what type of website would be successful. Some of those ideas were right on the mark and others bombed big-time. Ultimately, SiteProNews.com, ExactSeek.com and GoArticles.com became the cornerstone sites for the network.

SB: This new network is being billed as "an affordable search engine advertising alternative to Pay-Per-Click". How does this model differ from the PPC model?

MS: There are two major differences. The most obvious is cost. Pay-per-click can be expensive, even for site owners who set monthly spending limits and who buy very targeted keyword terms to reduce irrelevant traffic. The model being promoted by the Independent Search Engine & Directory Network (ISEDN) sells keyword terms for a one-time, flat fee. The intial cost is the only cost. For example, purchasing a single keyword term for 3 months in our model costs $12. It's doubtful anyone can buy a keyword term on any PPC engine that costs $4 per month. The reality is that the better keyword terms on PPC engines can cost $4 or more per click.

The second major difference is in the area of click-fraud. It may be an overstatement to say that click fraud is rampant on the major PPC engines, but it is significant, possibly comprising as much as 20% of all clicks.

In the ISEDN model there is simply no incentive for click fraud to occur. Hostile competitor sites could click on your ISEDN listing all day, every day, and it wouldn't cost you anymore than what you originally paid.

SB: How does this model differ from the discontinued pay-for-inclusion model previously offered by Inktomi and others?

MS: The biggest drawback to the old pay-for-inclusion programs offered by Inktomi and others was that paid site listings and free site listings were lumped together in giant databases with little to differentiate the two other than that paid listings were indexed more frequently. Site owners who bought listings in these programs received no preferential placement and consequently had no better chance of having their sites rank well than site owners who had free site listings.

In the ISEDN model, advertisers are guaranteed top 10 exposure for their website listings across the entire network of search engines and directories. This kind of premium placement is made possible by the fact that the number of times any keyword term can be purchased is limited and all paid inclusion listings are rotated in the SERPs (search engine result pages) throughout the network.

Surveys of searcher behavior have consistently shown that few searchers look at more than 30 search results for any given query. We based the ISEDN model on that behavior and limited the sale of any keyword term to 30. On ExactSeek.com we display 10 paid inclusion listings per SERP in Google-type ad boxes. The ad boxes rotate randomly on the page and between pages for every search of the keyword term. If a keyword term has been sold less than 10 times, the paid listing always appears on the first page of search results although not in the same position. If the keyword term has been sold more than 10 times then paid listings begin to rotate between the SERPs. The worst case scenario for an advertiser would be to own a sold out keyword term in which case the advertiser's ad would appear on the first page of results roughly once of every 3 searches on his keyword term.

The same principle applies to all ISEDN sites, although not all ISEDN member sites display paid inclusion listings in Google-type ad boxes or have the same number shown on a SERP.

SB: If each keyword is limited to 30 advertisers, couldn't the best keywords become "sold out" very quickly (leaving potential advertisers with less to choose from)?

MS: That depends on how you define "best keywords". Best for me might not be best for you even if we happen to be in the same industry. There are literally millions of keyword combinations available.

Also, because paid listings in our model are tied to a fixed time period of 3 or 12 months, many advertisers simply forget to renew their keywords and as a result hundreds of keyword terms become available on a continual basis. However, in the event that keyword availability ever does become a problem, we may have to look at changing some program parameters to accommodate demand.

SB: Are there any plans to syndicate results to non-member websites the way Google does with its ads?

MS: No specific plans at this time, but the idea has been discussed and is a logical extension of our current advertising model.

SB: Let’s turn now to the search engine users. How do they benefit from the ISEDN?

MS: I think the real benefit to searchers will be the realization that there are some great search and directory sites on the Web and that search is not just the majors like Google, Yahoo! and MSN.

In the longer term, I'm hoping that the ISEDN as an organization can act as a counter to the gradual monopolization of search on the Web by a few a big players with deep pockets.

SB: Approximately how many searches per month does the ISEDN currently process?

MS: We estimate that pay-for-inclusion listings are displayed approximately 120 million times per month across the network. Unfortunately, there simply hasn't been time to obtain exact information from the individual members in the few weeks since the ISEDN was founded and given its rapid growth (approximately 3 to 5 new members each week).

We expect members will begin to provide detailed search impression numbers in the near future at which time we'll be able to specify the network's overall search reach. Of course, that reach will grow as the ISEDN grows.

SB: What are your plans for this network in the future, and do you see it competing with the 'major' search engines?

MS: The network is really too new for me to speculate on how it might evolve. Although ExactSeek is the founding member of the ISEDN, it is only one member. I'm looking forward to sharing ideas and objectives with the other members. There are some very intelligent and talented people in the ISEDN who I believe will help determine exactly how the organization develops and evolves in the coming months.

Do I think the ISEDN can compete with the "major" engines? Absolutely. Certainly, that's true with respect to search engine marketing/advertising. And, although none of the individual members in the ISEDN may be able to compete with the majors in terms of search traffic, the ISEDN with 50, 75, or 100 members, can. Keep in mind that unlike Google or Yahoo, we don't need to funnel more and more traffic through a single entry point. All we need to do is sign up more members to aggregate more search traffic. In any case, we look forward to the challenge.

SB: Thank you for your time Mel, and best of luck with the ISEDN.

By Scott Buresh
August 23, 2005
http://searchengineguide.com/buresh/2005/0823_sb1.html

Posted by Hans A. Koch at 09:56 AM | Comments (0)

August 15, 2005

Click fraud is Internet advertising's new plague

Pay-per-click ads may be too costly, not worth the investment

While the Internet is capable of providing unparalleled visibility for your practice, it has always been plagued with problems. The endless mounds of spam that make it to our inboxes are just the tip of the iceberg. Nevertheless, for today's physician, the Internet is the most important place to advertise.

To demonstrate where your advertising dollars are best spent online, this article will discuss both spam and click fraud, an emerging and perhaps more ominous crisis in Internet advertising.

Spam and other illnesses

Many experts believe spam poses the biggest threat to businesses that have an online presence. According to Brightmail Inc., a major vendor of anti-spam software, roughly 40% of all e-mail traffic in the United States is spam, up from 8% in late 2001 and nearly doubling in the past 6 months. By the end of this year, industry experts predict, fully half of all e-mail will be unsolicited. The armies representing the Internet's good guys may never be able to defeat the spammers.

Spam's opportunity costs collectively represent the greatest cost to employers using the Internet as a business tool today. The band width (Internet load) that spam occupies—along with the equipment, software, and manpower to handle it—represents the second biggest cost. According to Einstein Medical's internal calculations, this accounts for about 11% of the total money allocated by companies to provide e-mail services to their employees.

As costly as spam is, a new breed of crooks that may be even more dangerous than the spammers has been growing steadily over the past 5 years. Click fraud is the game and pay-for-click advertising is their ballcourt. The players could be your competitors. To understand the what, how, and why of click fraud, we need to revisit the story of the Internet itself.

Internet advertising

Internet advertising has undergone some dramatic changes since the launch of the first major search engine, Yahoo! in 1995. The first form of online advertising, known as "general run advertising," came about in the mid-1990s. This early stage of Internet marketing was not very targeted; in fact, the banner ads that appeared at the top of search engine results pages had no correlation to the search terms that produced the results.

For example, if a person searched for "LASIK," a Visa ad might come up on the results page. Conversely, searching for "Visa" could just as easily produce a LASIK banner ad. These advertisements were sold on a cost-per-one-thousand impressions, which is very similar to how TV advertising is sold.

The next wave of Internet advertising began in the mid- to late-1990s and centered on "key word search," a method that proved much more effective for advertisers and consumers alike. Key word search made it possible for potential patients to find advertisements pertaining to the searches they were conducting. When consumers searched using the term "LASIK," an advertisement that dealt specifically with LASIK would appear. Key word search provided a greater return on investment for advertisers and a greater search engine user experience for consumers.

The main problem key word advertising posed for search engines was cost. Many factors, including the number of small advertisers wanting to buy key words, the complex artwork required to design key word advertising, and the management associated with these factors, made key word advertising a very labor-intensive approach.

A successful overture

In 1999, Overture came into the market with what seemed like the answer to the administrative headaches of key word advertising. Overture's auction-based, pay-per-click (PPC) advertising eliminated the ingredient causing most of the pain—human beings—and replaced it with automated software.

Along with the two other major strategies used to achieve visibility on the search engines (Internet directories and search engine optimization), pay-per-click advertising's software-driven bidding process has enabled advertisers to get more visibility on the search engines. Potential advertisers simply navigate to the advertiser section of the search engines to start the bidding process. The highest bidder gets a link at the top of the search results page. Advertisers with lower bids appear further down in the results (the lower the bid, the further down).

This bidding process is similar to traditional auctions in some ways and dissimilar in others. Like traditional auctions, of course, the bidding for pay-per-click auctions goes higher for more valuable items. For example, on Overture the winning bids for the search term "laser vision correction" are much higher than for "hand surgery." But unlike traditional auctions, the winning bidder in pay-per-click auctions doesn't get to keep the spoils forever. In fact, the bidding for pay-per click auctions is perpetual, meaning you are only as good as your last bid! The bidding keeps going, with no permanent winner.

Pay-per-click leads to fraud

The advent of Overture's pay-per-click model had a colossal effect on the search engine world. Seeing the success Overture was having, in August 2003, search giant Google scrapped its old key word advertising strategy and created the pay-per-click-driven Google AdWords. Today, MSN is the only major search engine that does not have its own proprietary pay-per-click bid model strategy (although Overture advertising does exist on the MSN search results).

The effect of this Internet revolution on advertisers has been a mixed bag. While Internet visibility can now be achieved with the click of a button (more like the swipe of a credit card), advertisers are also much more likely to become victims of fraud. People with few scruples can click on their competitors' pay-per-click ads every time they see them on the search engines. If your latest bid is $5 per click, and a dishonest competitor clicks on the pay-per-click advertising 10 times, your bill suddenly becomes $50. If someone clicks on the advertising 50 times, it would be $250.

This is click fraud, and it's the reason pay-per-click advertising is a realm you may want to avoid. Disturbingly, our contacts in the field of Internet advertising estimate that 30% of pay-per-clicks are fraudulent. (Incidentally, that's one-third more money in the pockets of the search engines, which are loathe to crack down on the perpetrators of click fraud.) This statistic is particularly sobering when you consider that pay-per-click advertising has only existed for 5 years. Spam e-mail, currently the industry's biggest aggravation, makes up 40% of all e-mails—but it's been around for 10 years. At this rate, pay-per-click fraud will undoubtedly surpass spam as the number-one problem of Internet advertisers. And this calls into question whether pay-per-click advertising itself is worth investing in.

With less problematic, more effective Internet strategies like directories and search engine optimization available, why bother?

Aug 15, 2005
Ophthalmology Times

http://www.ophthalmologytimes.com/ophthalmologytimes/article/articleDetail.jsp?id=175972&pageID=1

Posted by Hans A. Koch at 09:59 AM | Comments (0)

August 11, 2005

Hacker Teaches Click Fraud At Conference!

I received a frightening email from one of my readers today following my newsletter titled:

The Great Google Meltdown

Phil writes...

I expected to see this story break soon.

Two weeks ago, I attended Defcon 13 in Las Vegas. If you dont know Defcon is a annual hacker conference that is held the weekend after the Blackhat Briefings. A well known “hacker” (I use the term loosely, I think the guy is LAME) who has a following thanks to podcasting and blogging did a presentation called

Hacking Google Adwords

During this presentation he covered much of what the marketing community has known for a few years already. He also went on to talk about the week security in Adwords and the fact that you can bump off the competition or companies that you have something against.

Long story short. He didnt mention CaCa but he did tell people it would be easy to script something that would simulate clicks and rotate proxy lists.

The problem with this is he introduced this to a room full of hackers and wannabes who never heard of this before. The information was not ground breaking, however, this kid managed to get a standing ovation.

My point in all of this?

The problem was just made worse and

I would expect to see new tools coming out over the next few months that make this easy for everyone to exploit

.

The word is out!

Yep. And click fraud will explode even more as hackers see the $$$ involved.

The speaker at the hacker conference has posted his Powerpoint presentation [Note: the presentation is from a hacker SCAN the thing for viruses!] and an article for you. The article was published in 2600 magazine which is THE magazine for hackers.

There are a shitload of podcasts out there that TEACH hackers how to screw you out of your ad dollars. And that should scare the piss out of you. Because it is only going to spread the word on how to do it…

Posted by Jason at 06:59 am
August 11th, 2005

http://goldblogger.com/wordpress/archives/hacker-teaches-click-fraud-at-conference

Posted by Hans A. Koch at 06:59 AM | Comments (0)

August 04, 2005

Interview with the AdSense million dollar man, Jason Calacanis

When Jason Calacanis wrote in his blog that he was on schedule to make a million dollars with Google AdSense over the next twelve months, he created a phenomenal buzz about the financial possibilities of running AdSense on blogs, as he does on his Weblogs Inc. network.

If back in September when we started playing with Google Adsense someone told me it would turn into a $1M a year business I would have laughed. A million bucks without a sales person? Give me a break!

However, yesterday we broke our $2,100 record with a $2,335 day. That’s an impressive number I know, because if we can take that number to $2,739.72 we’re at—wait for it—$1M a year.

I asked Jason if he'd care to answer some questions on how he does it, he graciously did just that, sharing his thoughts, ideas and advice on AdSense.

Why did you decide to try out AdSense back in September?

We were launching blogs quicker then we could sell advertising, so we figured we could either give the ad space away (like magazines do) or we could try to make a little money from it with 3rd party ad networks like AdSense, Tribal Fusion, Fast Click, and Burst.

Did you initially place AdSense on all pages, or did you gradually add it over time? Do all pages on Weblogs Inc now run AdSense?

We started with a couple of blogs and then quickly put it all over the network.

What single change do you think made the biggest leap in your AdSense income?

1. Taking off the borders around the advertisement
2. Making the links the same color as the links on the blog

Why did you select the ad unit location that you did? (Curious because it is not generally a high CTR position).

We were sold out of leaderboards on our big blogs, so we figured we could slip the thin horizontal banner without it feeling like too much advertising. People tend to like--or not care about--Google Adsense ads. Which is great compared to graphical banners which people sometimes hate.

How successful have you found rotating the ad unit colors to combat banner blindness?

Never tried that... thanks for the tip!

You use channels on your sites, do you also check your channel reports on a regular basis? Have they helped you with making decisions regarding AdSense?

We do channels for each blog, and now we are doing channels for each position on each blog. This is a lot of work because we have seven positions across 80 blogs. I wish Google Adsense would automatically do reports by format (anyone listening over there?!).

How do you balance the user experience versus advertising revenue? Do you deliberately chose the less intrusive AdSense ad formats on Weblogs Inc?

We don't like to abuse our users. We like to give a lot of content on one page (15 stories), and keep the heavy advertising up top. So, after the first page down your past most of the advertising.

You mention that your AdSense revenue would be higher if it wasn't for advertising commitments already made on blogs such as Engadget. Is AdSense successful enough that you plan to place AdSense in those more prominent ad spaces when they become available, or is the current secondary placement on those blogs working well enough?

AdSense doesn't reach the level of display advertising ($3-12 CPM) and it never will--unless Google started selling display advertising! Wait a second... that's a really good idea!

Do you ever worry about someone attempting to target you for click fraud?

Not at all. Google has the issue totally under control. Besides, the advertisers correct click fraud by lowering the price of each click by what they think the cost of fraud is. So, if people were paying $1 per click, and they thought 5% were fake they would move their bid to .95. This is why the whole issue of click fraud is overblown: the advertisers look at the results and bid accordingly! People who bring up this issue--like the press--don't understand that Google Adword buyers are very, very smart and take into account a certain level of fraud.

Every system has fraud, look at credit cards! Should we stop using credit cards just because there is massive fraud? No, because on a percentage basis it is manageable. There is an acceptable fraud level in any economic system and we balance the freedom of having a credit card with the fact that someone could scam the system.

Do you plan to test Yahoo Publisher Network when it becomes available? What will be your deciding factor when choosing between the two - strictly revenue or something beyond that? What about some of the other contextual ad networks on the market?

This is all about performance. If Yahoo Publisher Network makes us more money we will give them the inventory. However, we don't have all the time in the world to swap out these networks all day long, so we can't try every ad network out there.

In fact, I've been telling the smaller ad networks that come to us now that they have to give us a "floor CPM." They would pay that floor rate in advance in order for us to even test their network. Out of the 10 ad networks I've told this to 8 think I'm crazy and two are considering doing it. So, I'm making some progress. :-)

In another year large publishers with quality products are going to be able to demand a minimum "floor CPM." Some folks might be getting this already. I would love to see Google or Yahoo say "we're gonna pay you at least a .25 CPM for your traffic, or 65% of the value of the clicks--whichever is greater." They could give you a report each month with both results.

If someone is going to beat Google at this game that is how they will do it, with a guaranteed minimum CPM. If I were trying to beat Google I would do three things: 1. disclose the % of the split, 2. give a floor CPM, and 3. direct sell CPM based advertising on top websites. In other words, add the direct selling that BlogAds or Tribal Fusion does to what Google already does. Then an advertisers could say "I'll pay a $5 CPM for the top leaderboard on your site, and .50 for ever other click you can get on your site."

That is the future: blended buys through one ad network.

I'm sure Google and Yahoo will offer this in the next year.

What is the best piece of advice you have for a publisher brand new to AdSense? What would you have done differently when you started with AdSense, knowing what you do now.

I would have run four ads per page, taken off the borders, and made the links the same color as the links on the blog. I would have also made channels for each position and blog so I could track things better.

How many times do you login to AdSense a day? Are you a stats junkie who checks every ten minutes? Or do you check only once or twice a day?

I have about 50 saved Adsense reports in a folder on my Opera browser. Every day I click on it and autoload the 50 pages. I then scan and look for trends. Sometimes I find a CTR spike or an eCPM of note. However, it's pretty steady at this point.

The best thing you can do to make more money is produce world-class content. That's what I spend my time on: finding people who can make world-class content... and pay them!

How successful have the AdSense for Feeds ads in your RSS been? Have you had a problem with readers not wanting ads in their feeds from you?

Like three folks were upset about RSS ads. Now, we have millions of people coming to our sites every month so we're not going to stop the revenue for three freaks who want free content without advertising (don't we all want that?!?!).

If you did a survey and asked people watching Desperate Housewives if they would consider paying to have it without commercials people would say yes. You could ask the same group if they would like to save money by watching the Sopranos for free with ads in it and they would say they would consider it!

Ads in RSS are no big deal. They are just like banners or text links on a web page. If you produce great content people will deal with the ads, and if you produce really great content a certain percentage of those folks will pay for the content (if you want to go that route). So, it's important that when you're running a business you ignore the freaks and listen to the real fans. Real fans of the site understand you need to make money in order to produce free content, and those real fans even visit the advertisers and buy their products knowing that it will support the product they love.

Jason will be at Search Engine Strategies next week in San Jose, and will be joining myself on the Earning from Search & Contextual ads session. You can read a bit more about the session here.

Thank you Jason for the interview!

August 04, 2005

http://www.jensense.com/archives/2005/08/interview_with.html

Posted by Hans A. Koch at 04:46 PM | Comments (0)

August 02, 2005

As Much as 29.5 Percent Click Fraud in Google's Pay-Per-Click Search Engine

Reports MarketingExperiments.com; New Research Published in The Marketing Experiments Journal Sheds Light on Growing Click Fraud Problem

ATLANTIC BEACH, Fla. --(Business Wire)-- Aug. 2, 2005 -- Research recently published in MarketingExperiments.com's online publication, The Marketing Experiments Journal, reveals up to 29.5 percent of paid search traffic may be fraudulent.

"From our research, we found that it is unlikely an individual committing click fraud by clicking an ad over and over will go undetected by Google," said Flint McGlaughlin, director of MEC labs. "But our research also shows that when more sophisticated systems and software are used, only a small percentage of the fraud is detected, with fraud increasing proportionate to the bid price."

The click fraud research brief can be found at www.MarketingExperiments.com and outlines what click fraud is, how significant of a problem it is and how it can successfully be avoided.

The experiment was conducted in conjunction with Los Angeles-based Clicks2Customers.com and focused on three pay-per-click (PPC) campaigns running during a 10-day period in 2005. Duplicate clicks were determined by comparing IP addresses, language, browser settings, referring URL, time of click, operating system, browser plug-ins and country of origin.

"Our random sample of PPC campaigns uncovered as much as 29.5 percent PPC fraud and showed that Google was able to account for and credit only a tiny portion of those fraudulent charges," McGlaughlin said. "Whether it is click fraud or the lesser known impression fraud, these fraudulent clicks can cause a lot of damage to advertisers because it drains their budgets. Companies should be aware of how big of a problem it really is and be equipped to more aptly detect it."

MarketingExperiments.com is an online research laboratory that determines which online strategies and tactics really work in Internet marketing. Results of its experiments are published for free online in The Marketing Experiments Journal.

Those interested in finding out more about the pay-per-click fraud problem can visit: www.MarketingExperiments.com.

About MarketingExperiments.com

MarketingExperiments.Com (MEC) is an online marketing research laboratory dedicated to discovering "what really works" in Internet marketing. MEC engages in primary and secondary research and publishes results in The Marketing Experiments Journal. To conduct relevant, practical experiments, MEC partners with clients such as the New York Times, Reuters News Service LLC, and USA Health Care. MarketingExperiments.com is a member of the MEC Labs Group and a division of Digital Trust, Inc. For more information, please visit www.MarketingExperiments.com.

[August 02, 2005]

http://www.tmcnet.com/usubmit/2005/aug/1169316.htm

Posted by Hans A. Koch at 05:32 PM | Comments (0)

MarketingExperiments Survey Finds High Click Fraud Levels

One of the biggest scourges to the pay-per-click method of advertising is the threat of fraudulent clicks and with the growth of things like foreign click fraud farms, this concern has become even more magnified.

Even Google stated in one of their IPO amendments that fraudulent clicks of text ads was one of the bigger threats facing their revenue generation process. From Google's second amendment: "If we fail to detect click-through fraud, we could lose the confidence of our advertisers, thereby causing our business to suffer." As you can imagine, click fraud is something Google takes quite seriously. You can imagine their collective reaction when news about the MarketingExperiments.com survey broke.

MarketingExperiments Survey Finds High Click Fraud Levels According to the MarketingExperiments.com study (and subsequent press release), as much as 29.5% of clicks on Google's AdWords ads could be fraudulent. The blame for this increase falls on the aforementioned click fraud farms as opposed to the web owner who's clicking his/her site ads in an attempt to boost profits. This is made apparent by Flint McGlaughlin, director of MEC labs, who says:

From our research, we found that it is unlikely an individual committing click fraud by clicking an ad over and over will go undetected by Google. But our research also shows that when more sophisticated systems and software are used, only a small percentage of the fraud is detected, with fraud increasing proportionate to the bid price.

To derive their position, MarketingExperiments conducted their study with the help of Clicks2Customers.com and focused on three PPC campaigns that were running during a 10-day period. Duplicate clicks were determined by comparing the IP address of the clicks acquired by the campaigns in question.

As of this article, Google had not responded to the results found during the MarketingExperiments survey, but one can expect the company to be concerned, especially if the ME findings turn out to be as accurate as their data indicated. For more on what Google considers to be a fraudulent click, please read their AdWords FAQ.

About the Author:
Chris Richardson is a search engine writer and editor for WebProNews.

Chris Richardson | Contributing Writer | 2005-08-02
http://www.webpronews.com/insidesearch/insidesearch/wpn-56-20050802MarketingExperimentsSurveyFindsHighClickFraudLevels.html

Posted by Hans A. Koch at 05:22 PM | Comments (0)

Putting an End to Click Fraud

Carat's Ron Belanger exhorts the second tier search engines to embrace CPA -- and shows us how everyone would benefit if they do so.

Every once in a while, I'll get a call from an analyst, a client or an industry peer looking to get some information that could signal the end to the search marketing boom. One buzz phrase that naysayers have embraced recently is "click fraud." Largely misunderstood, click fraud is by no means the David that can bring down the Goliath of search. As long as everyone plays their part, that is, and the industry does away with a very one-sided pricing model.

In looking at click fraud from a search marketing perspective, it becomes abundantly clear that there exists a large delta between the two juggernauts and the rest of the industry. The systems put in place at Yahoo! search marketing and Google do a comprehensive job of proactively mining referral data to identify any traffic that seems suspicious. This fraudulent traffic is then credited back to the marketer, all without the need for arbitration, disputes or lengthy ordeals. Since the majority of search marketers don't explore their options beyond Yahoo! and Google, most people do not need to worry themselves about this issue.

For marketers who embrace a more comprehensive distribution strategy, click fraud does begin to take form in a material way. Many of the smaller distribution engines, such as FindWhat and Kanoodle, have less sophisticated fraud detection systems in place. In the past, we have seen FindWhat drive the same volume of traffic, if not more, than Google on the same keyword portfolio. If Google represents roughly 55 percent of the market (including AOL), and FindWhat somewhere around one percent, a third grader could see that there might be something fishy going on. Once the difference in conversion rates is analyzed, it becomes clear that much of the traffic a marketer is paying for is not derived from genuine human beings earnestly clicking on your paid search listing.

Here is an example from one of our clients. This client runs a mature search marketing campaign based on a target cost per acquisition. In looking at year-to-date data, we see that their average conversion rate from search is 2.35 percent. For some of the Internet Yellow Pages (IYP) sites like Verizon Superpages, it is closer to a six percent conversion rate. However, the FindWhat channel comes in at just 0.26 percent for the year, making it a channel that we can no longer justify managing. It pains us to do this as there are some legitimate sales that are coming through this channel. Everyone loses in this situation. FindWhat loses revenue; our client loses some incremental sales, and our team ends up frustrated as they are unable to use all search distribution channels that are available to them.

Anytime there is an alignment of business goals such as the scenario above, a solution should be easy to reach. In the case of click fraud, there is an unfair assumption of risk that lives on the shoulders of the advertiser. The advertiser buys from a certain channel with the assumption that what they are buying are actual searchers and not an automated script or team of manual clickers somewhere offshore. It isn't until after the advertiser spends their marketing dollars and analyzes the data that they realize that the traffic is not quality traffic. A solution lies in the risk being shifted from advertiser to publisher, in the case of the second tier engines.

Let's stop for a minute and look at how our offline brethren tackle the risk issues at the television upfront.

During the annual boondoggle known as the upfront, a season's worth of television advertising is purchased in a frenzied week of late nights, endless parties and celebrity hobnobbing. Advertisers buy certain programs for their anticipated audience. Obviously, there is a high degree of guesswork being done when the audience numbers are applied to a given show. While the television upfront has its share of critics, the one aspect to it that does make sense is the concept of "makegoods." Makegoods are the networks' way of putting some skin in the game. Say, for example, next season's version of "The Apprentice" is a real stinker and only half of the anticipated audience tunes in. The network then has to deliver the promised audience that the advertiser paid for. This can be done by providing advertising time on other shows, or an extended run on the same show. Either way, the advertiser ends up getting the audience they desired. It is the one aspect of the television upfront that I think the online community should embrace.

Imagine for a moment that the Tier 2 engines all abandon their Cost Per Click (CPC) pricing model in favor of a Cost Per Action (CPA) model. Rather than sticking the advertiser with all the risk, the search engine would pick up the risk and put its money where its mouth is. This would fundamentally change the way in which search marketing is budgeted, forecasted and planned. First of all, the traditional model of initially launching with Yahoo! and Google to figure out a keyword portfolio -- and then migrating to the second tier -- would disappear. Search marketers would first launch with the Tier 2s to establish what phrases, categories and creative are the most salient for their audience. Only after some solid analysis of performance on Tier 2s would an agency recommend the higher risk (though higher volume) options of the larger engines. This would lead to a larger number of advertisers participating in campaigns with the likes of FindWhat, Kanoodle, Enhance and others.

To maximize revenues, the search engines could migrate to a dynamic pricing model, albeit on the CPA side. Rather than having click bid tolerance dictate who is number one versus number two, listings could prioritized based on what the CPA payout to the engine would be. Say for the keyword "airline ticket" there are four bidders, the highest of which agrees to pay the publisher a CPA of $12, versus $11, $10 and $8. This advertiser would appear first, allowing the search publishers to maximize their revenue opportunities, while taking the burden of click fraud from the advertiser.

The incentive for click fraud would disappear. No one would be getting paid for non-converting traffic. Trust me, if no one is getting paid for it, no one will waste their time building scripts and hiring people to click on paid search listings. It also eliminates the dirty tactic of competitors clicking on each other's listings to exhaust ad budgets.

For this model to work there would have to be some post-click data sharing between advertiser and publisher. Ideally, both publisher and advertiser would use a third party ad serving, bid management or analytics package to verify the conversion data. The usual precautions like mutual non-disclosure agreements would have to be established for data protection on both sides of the equation. It would seem to me that this level of effort would be well worth it for both parties involved.

So before everyone shorts their Google stock and writes off search marketing as the next spam, let us step up collectively and nip click fraud in the bud by shifting the risk assumption slightly off the shoulders of the advertiser. With no incentive for click fraud, the problem will go away and both advertiser and publisher will be better off for it.

Ron Belanger is Vice President of Search and Affiliate Marketing for Carat Interactive. Belanger is responsible for guiding the strategic vision of Carat Interactive's search engine marketing and affiliate marketing practices. Belanger has five years of search engine marketing experience coupled with nearly ten years of technology consulting and account management. Belanger has crafted successful search strategies for leading companies such as Radio Shack, Philips, Wachovia and Best Buy. He was elected to the board of directors at SEMPO (Search Engine Marketing Professionals Organization) in 2005, and sits on the MSN Search Advisory Council. He has appeared in publications such as B2B, OMMA Magazine, San Jose Mercury Daily News, Adweek and AdAge. He is a frequent speaker at Ad:Tech, Search Engine Strategies, and other events relating to interactive marketing. Ron Belanger earned a BA from Clark University.

Carat Interactive is a digital marketing agency committed to growing its clients' businesses by creating more profitable and enduring relationships with their customers across all interactive platforms. Carat Interactive is one of the world's largest interactive agencies with more than twenty offices around the globe. With North American headquarters based in Boston, MA, Carat Interactive has four additional offices in New York, Los Angeles, San Francisco and Atlanta. Carat Interactive is owned by Carat, the world's largest independent media agency with more than $15 billion in worldwide billings. Carat Interactive clients include Pfizer, Hyundai/KIA, RadioShack, Hyatt, UPN, and Palm, among others. For more information on Carat Interactive's services, visit its website at www.caratinteractive.com.

By Ron Belanger

http://www.imediaconnection.com/content/6439.asp

Posted by Hans A. Koch at 10:13 AM | Comments (0)

July 15, 2005

Click Fraud - An Overview

A Brief History of Click Fraud Jessie C. Stricchiola, President Alchemist Media, Inc. 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,

About Click Fraud

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September 27, 2006

Click fraud growing on the Web

September 01, 2006

Google CEO clicks ads 'all the time,' are his clicks marked 'invalid'?

August 05, 2006

Click Fraud Threatens Web

How Click Fraud could swallow the Internet

Exposing Click Fraud

April 13, 2006

In Game of Click and Mouse, Advertisers Come Up Empty

December 16, 2005

As much as 29.5 percent PPC fraud

September 15, 2005

Why CPA is Not a Cure for Click Fraud

September 01, 2005

Effective Pay-Per-Click Marketing

Combatting Click Fraud

August 31, 2005

Is Google serious about click fraud?

August 29, 2005

AdWords click quality defined - FROM GOOGLE

August 24, 2005

Click Fraud is Growing

Google Adwords and PPC fraud revealed

August 23, 2005

Google sued over 'click fraud' in Adwords

A New Keyword Advertising Model: An Interview with Mel Strocen of Jayde Online

August 15, 2005

Click fraud is Internet advertising's new plague

August 11, 2005

Hacker Teaches Click Fraud At Conference!

August 04, 2005

Interview with the AdSense million dollar man, Jason Calacanis

August 02, 2005

As Much as 29.5 Percent Click Fraud in Google's Pay-Per-Click Search Engine

MarketingExperiments Survey Finds High Click Fraud Levels

Putting an End to Click Fraud

July 15, 2005

Click Fraud - An Overview