Click fraud: the flaw in the pay-per-click model [BT broadband office]

Click fraud: the flaw in the pay-per-click model

Posted 7 August 2007 at 8:32AM by Simon Dickson in Doing business online

Is it shocking to learn that roughly one in every six clicks on a pay-per-click advert is deemed fraudulent? Data published by the Click Fraud Network, an alliance of advertisers and search providers, suggests that 15.8% of all clicks are malicious, rising to over 25% when you take search engine ads out of the picture.

Click fraud is the achilles heel of the pay-per-click advertising model. Your advertisement appears on internet pages relevant to your company's product or service: usually a search engine, but perhaps also on a 'proper' website. You don't pay until someone clicks on your ad... so in theory, you're only charged when someone sees what you're offering, likes it, and wants to know more.

But let's say you have a website, and you start including Google adverts on your pages. When someone clicks one of the adverts on your page, the advertiser is charged: Google gets some, and you get some too. It doesn't take a genius to work out that if you click on the adverts on your own page, money flows from the advertiser's account to your account. Of course it's against the terms and conditions, but of course it happens.

Another form of click fraud is about harming the advertiser, rather than making money for the 'fraudster'. If you click on adverts for your competitors, for example, it costs them money - and of course, it doesn't lead to any business. And with advertisers typically applying a daily spending limit, if you click enough times on their ads, their budget will run out, and their ads will stop appearing.

Is it a problem? You could argue that if one click in every six is dubious, the other five are valid expressions of interest by a potential customer - and no other advertising method comes close to that level of sales lead qualification. Naturally, the search engines are keen to eliminate it wherever possible - but it's an impossible job. If an advert on my own site catches my attention, why shouldn't I click on it? There's surely a reasonable chance that I'm interested in what they're selling - otherwise, the ad wouldn't have been selected as relevant to my material.

In the meantime, to try and reduce your exposure, you might want to advertise on search queries only: in the case of Google ads, that means opting out of the Google Network. And think positive: the glass is still five-sixths full.

Tags: adwords, click fraud, google, pay-per-click

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Comments

1. At August 10, 2007 11:53 AM, Robert Currie wrote:

Personally I find online adverts more irritating that intriguing. Most of them are vulgar, eye-melting wastes of pixels, and the ones that aren't are just low-res rehashes of the TV advert.

And if I was looking for some extra revenue, putting Google Ads on my website would be the last thing I'd consider. In most (but admittedly not all) circumstances, it can make a site look tacky.

2. At August 14, 2007 3:49 PM, Michael Scott wrote:

I agree with Robert, Google Ads looks tacky and low budget. I dont feel 100% confident about clicking on a Google Ads link. I would say a lot of the time it does the advertiser more harm than good.

3. At August 14, 2007 7:43 PM, Oliver Konieczny wrote:

I believe it happened to us. The hits went up and so did the cost. We did not have the business from the clicks. Since we stop using the adware advert, we found a small drop in hits and our internet business is starting to grow as it should do.

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