Pay-Per-Click Fraud Exposed--Part II
According to Andy Jones, a member of the Best Practices Search Engine Forums, fraudulent clicks are just another aspect of the business. "Any of us that use AdWords or any other PPC has to pay for a certain percentage of fraudulent clicks," he said in a forum discussion. "I factor it in as a cost of doing business."
Can you believe that? In other words, he's saying, I know the pay-per-click companies are stealing my money, but it's okay, because I've considered that fact ahead of time.
Unfortunately, that mentality is pervasive among pay-per-click advertisers. No wonder the pay-per-click companies aren't making stopping pay-per-click fraud a top priority. Who can blame them? If their advertisers don't care, why should they? Heck, with all of the money the pay-per-click companies are making, it's actually more cost effective to issue an occasional refund, than to develop technology to eliminate click fraud.
And if you read between the lines of the following statement, Google even admitted as much:
In a recent filing to the Securities and Exchange Commission, Google acknowledged, "We are exposed to the risk of fraudulent clicks on our ads. We have regularly paid refunds related to fraudulent clicks and expect to do so in the future. If we are unable to stop this fraudulent activity, these refunds may increase. If we find new evidence of past fraudulent clicks, we may have to issue refunds retroactively of amounts previously paid to our Google Network members."
That statement doesn't exactly instill any confidence, now does it?
And if Overture is asked about click fraud, they'll just issue their standard company line:
"Our Click Protection System is sophisticated software that evaluates each of our advertisers' clicks. This software makes decisions as to the validity of any click. Our Click Protection System uses search and click data to make both rules-based inferences and pattern recognition-based inferences about which clicks are valid clicks. We have two patents pending related to this technology, so we cannot currently disclose too many details about the methods we use."
Do you honestly think newspaper, magazine, radio or tv advertisers would just sit back and let those media get away with blatantly stealing their money? You know they wouldn't.
Then why do pay-per-click advertisers allow it? I don't know the exact answer to that question, but I have my theories: First of all, you're talking about a whole different level of sophistication with pay-per-click advertisers, compared to media advertisers. Many pay-per-click advertisers don't even know how to access or even analyze their log files, so they have no idea how much money is actually being stolen from them.
In addition, some pay-per-click advertisers are making more money than they've ever made before. And rather than upset the apple cart, they'd rather keep quiet and allow the vicious cycle of click fraud to continue, so that they can keep cashing those big checks.
I also suspect many advertisers are afraid that if they complain too loudly, they may be penalized in the search engines, in regard to their free listings.
If my theories are accurate, silence is one heck of a trade off, if you ask me. Why? Because according to a report on MediaPost, an online study done by Clicklab revealed that fraudulent clicks can account for more than 50 percent of your total clicks.
So, if the goal of pay-per-click search engines is to bring lucrative, targeted traffic to your web site, what are the pay-per-click search engines doing about the click fraud epidemic, to prevent abuse that needlessly drive up your costs and reduce your ROI?
Unfortunately, since so many pay-per-click advertisers are willing to play the role of "lambs going to slaughter," the pay-per-click companies really don't have to do anything.
In the meantime, your ROI is going to continue to plummet, and the pay-per-click companies are going to continue to milk those cash cows (AKA) pay-per-click advertisers, for all they're worth!
This article was posted on October 24, 2004
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