Just when we thought, we had heard it all about "fraud on the
internet". There are the "fishing" emails, enticing (or more
likely scaring) users into giving up their bank account (or
paypal) information. There is the "multi level marketing"
schemes, the ID thefts, the spyware. The SCAM-THRU-SPAM market
is just huge...and not necessarily limited to financial losses.
Think of those "15 million dollar waiting to be picked up from
that Nigerian bank account" scam. When the gullible follow up
and actually fly to Nigeria , they get kidnapped and ransomed.
Occasionally murdered. Makes the "cheap Viagra" brokers look
like good Samaritans!
All these abuses are reducing our trust in the internet and
e-commerce. Which is a shame, given the efficiency and cost
savings that this medium allows, especially in terms of targeted
advertisement. One example of such advertisement is PPC, or Pay
Per Click. This is a great improvement over the good old
flashing banner ad's that we all know(and have grown to hate).
The Pay Per Click ad's are text base, with no slow loading
flashy graphics detracting from the site. Best of all, they are
context dependent. They get displayed only when a person
searches for a certain "matching keyword". PPC is extremely
popular for one reason with advertisers. It's simple to
demonstrate that it brings traffic to their site. For the people
searching for something it's sometimes a shortcut to click on
PPC ads rather than sift through the clutter that search engines
often display organically. This Pay Per Click (PPC)advertising
market size exceeds $5 Billion/year and keeps growing. Often at
the expense of radio, TV and magazine advertising. Whether it's
cost effective to use such a program or it gives you the
requisite ROI is topic for another web analytics discussion.
Unfortunately, if you advertise your site via Pay per Click
Programs like Google Adwords & Overture, then it's exceedingly
likely that you are a Click Fraud Victim. Click fraud, takes
place when a person or program visits a website with no
intention of browsing the site, purchasing a product or
performing any other type of conversion action. The intent is to
make the advertiser suffer losses (or make extra income). This
new type of cyber fraud is on the rise, and estimates on the
loss to the advertiser through click fraud vary between 10-40%
depending on the keyword and the industry. A simple calculation
shows us that the advertisers are shelling out $ 500 Million to
2 Billion per year to click fraudsters. Google and Yahoo are
among the leading providers of advertising links, usually
targeted to the audience based on the contents of a page. The
issue, to some extent boils down to the difference between a
genuine user(sometimes referred to as a "good faith" visitor)
and a click fraud artist. According to a Newsweek article,
Google and Yahoo are struggling to adjust the definition of
"good-faith click" and their policies, and methods of preventing
this new type of click fraud. Given the rampant rise, it's a
work in progress.
Who perpetrates the click fraud? A significant portion is
performed by the competitors who aim to drive up the
advertisement cost of their rivals, and hence drain their
rivals' marketing budget. This is a form of digital industrial
sabotage. There are the profiteers using ad-sense fraud (see
Google AdSense Fraud Article about these shoplifters ) then
there's the impression fraud guys ( Article on Impression Fraud)
who are the sneakiest. There's always the existence of the
terminated employee getting his revenge by clicking on the Pay
Per Click ( PPC ) advertisement. The one that's probably the
hardest to nail down is the equivalent of a drive by clicker.
Someone who enjoys random acts of click violence and other such
mayhem. Anecdotally, a person who wanted to click on PPC ads of
all the lawyers, just because he "hates" lawyers. There was a
method to his madness, since the PPC keywords that lawyers bid
for, go for as much as $50!
To gauge the seriousness of the problem, who better to listen to
than Google's chief financial officer, George Reyes. Click fraud
is "the biggest threat to the Internet economy," Reyes said
during a December investors conference. "Something has to be
done about this really, really quickly, because potentially it
threatens our business model." Ask Jeeves, similarly thinks of
it as a serious enough risk to list it in it's regulatory
filings. They feel that their revenue might decline "if
advertisers come to perceive click-fraud as a widespread and
pervasive problem."
We have to agree with them. The advertiser pays a large premium
for having focused, directed traffic to his website through the
paid listing. If banks lose their credibility, then people will
stop using them and hide their dollars in their mattresses. If
the search engines lose their credibility due to click fraud,
their customers will vote with their dollars and move back to
more traditional forms of advertisement. Similarly, as the PPC
customers see their advertising ROI drop, often due to such
fraudulent activities they may start walking towards the exits.
One would have thought that given such a threat to their
business model, the big search engines would have been more
forthcoming with information pertaining to data regarding the
visitor to a site through PPC and incidence of click fraud. Such
is not the case. The big two, Google and Overture are extremely
secretive, and seldom give out any traffic information, or
details about how they track click fraud. Their approach is not
without justification, given the possibility of people reverse
engineering their tracking mechanisms and allowing the
fraudsters to tweak their tactics.
The search engines are also accused of turning a blind eye to
click fraud. The reasoning goes that they are likely to take a
severe hit to their earnings if all the click fraud cases are
detected. They have not been following up on anything but the
most egregious instances of click fraud. We are inclined to
believe that the search engines make some effort to play fair,
but they are hobbled by some technological limitations to their
ability to track click fraud.
The biggest one is that the search engines can not possibly know
the overall trends and analytics of the advertiser's site. A
good analytics package would be able to provide the statistics
which show the optimal path to conversion, places where
abandonment may happen, the average time taken reading the "top"
pages etc. This is the "signature" may very well include time
spent on the path, conversion, on site search etc. of a genuine
client. Basically, the serious visitor has a certain pattern
which a malicious user or a bot would not be able to simulate.
Similarly, for a certain site, the fraudsters too have their own
"signature"(i.e. a statistical pattern). When making a decision
whether a certain visitor is a likely fraudster, one of the
techniques used is to match against the "genuine" signature and
then against that of "fraudster". The search engines don't have
access to this data(since they are unable to track visitors once
the visitor click), while a good click fraud detection software
or service has access and is able to do such detection.
Furthermore, the search engines can't track traffic from
multiple search engines belonging to same network(a favorite of
the "classic" competitor click fraud). For instance, Overture
network is composed of Lycos, MSN and Alta Vista. The click
fraud artist could potentially click on an ad using Lycos, move
to MSN and then Alta Vista clicking on the same ad.
Overture/Yahoo will not mark/catch the perpetrator. It's even
worse when the ad is displayed across Google and Overture! It is
possible that the situation will be exacerbated when the
upcoming Yahoo "Publisher" program(the equivalent of Google
Adsense) goes mainstream. However, a dedicated click fraud
detection effort, if based on rigorous analytics, website
statistics and software pattern matching should have no problem
nailing these guys.
Lastly, some efforts need to be done with customized reporting,
when the pattern of abuse is more complicated. The search
engines don't have the resources(or interest) to drill deep into
the analytics data and audit individual advertisers website
stats. However, they will consider refunds if presented with
detailed and convincing data. Anecdotal evidence suggests that
Google is the tightest with AdWords fraud refunds, while
Overture(Yahoo) is somewhat more liberal. Naturally, you would
want to present yourself as a competent, organized person or
organization when applying for refund. The arguments need to be
backed up with statistics and actual events to be credible. If
you are a regular PPC customer, you have the unfortunate task of
defending what's rightfully yours from the click fraud artists.
This can be done with the help of expertise for auditing and
reporting click-fraud developed in-house or by outsourcing to an
analytics based click fraud detection company.
The FTC has been cracking down on the consumer fraud and the
fraudsters, by increasing resources to track down and prosecute
the "fishers", the "investment schemes" and the "real estate
opportunity" guys. However, Eileen Harrington, director of
marketing opportunities has declined to deem "click fraud" as
something that directly affects the consumer. Therefore, the FTC
does not want to tackle the click fraud. The search engines too
are unable to fully detect fraud, due to the reasons described
above. One wonders who is there to look after the best interests
of an advertiser trying to make it on the web and getting
cheated by fraudsters. Given the PPC fraud rate, the advertiser
has to really question her conversion numbers. Is that
conversion ratio of 1% really natural, or could it be higher if
the fraudsters are excluded from the traffic, and the money
wasted on them refunded. For More Details visit
www.sofizar.com/click-fraud-services.php
About the author:
Ron Arthur is a Search Engine Marketer working for Carlsbad, CA
based web-metrics company Sofizar. He is a member of the team
developing a click fraud detection software, ZarTective. While
not writing expose's on the darker side of the web, he plays
with his cat "Mano" and watches "Rocky Horror Picture Show" for
the 17th time. Or maybe 117th.
Written by: Arthur
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