So you know the story, (or maybe you don’t but that’s ok); you’ve got a comprehensive list of keywords which you’ve then trimmed and pruned like a cherished bonsai tree, leading to an impressive click through rate and steady flow of measurable results from the PPC campaign.

Then, as if from nowhere, it all goes belly up. You’re getting a large amount of clicks, your budget is being used up rapidly but you’re seeing no benefits from your marketing.

It’s a familiar story to a number of companies and in the past, a diverse range of companies have suffered from click fraud, including a private jet company.

Whilst often difficult to identify, suspicions can often be aroused by a large number of clicks originating from one IP address, particularly in a country where the advertiser is not operating.

Predominantly in the US, legal action has been taken both by advertisers against search engines, who have the deep pockets to pay sums lost due to click fraud, and in turn by Google and Yahoo against perpetrators of click fraud. Indeed Google has in the past agreed to a $90,000,000 settlement in a class action lawsuit filed in America by Lanes Collectibles.

Going forward, there are certain allegations that because search engines directly benefit from clicks on adverts regardless of whether legitimate or fraudulent, they are not particularly concerned about taking action to stamp out click fraud.

Whilst one of the main issues is that the fraud is hard to detect and compile evidence of, the case of Michael Bradley is certainly of interest, in that the case was dropped against Mr Bradley, who had attempted to blackmail Google into handing over $150,000 in return for not releasing a computer programme designed to facilitate click fraud.

The case was allegedly dropped due to Google’s misgivings about co-operating with the authorities as this would mean full disclosure of their practices and safeguards against click fraud. Although in their defence, revealing such information would obviously trigger moves to find loopholes and ways to circumvent the protections in place.

Click fraud is certainly on the minds’ of advertisers at present, and in addition to this problem, a new variant has recently arisen known as click laundering. In a variation on the established theme, click launderers create a system where clicks are generated on various different websites before being disguised to appear as though they took place on adverts that appear on another website.

These clicks then earn the site owner revenue due to the sharing of income that takes place between the site owner and the search engine that places the adverts on the site. In press release, Microsoft stated that had the scheme gone undetected it would have cost the advertiser hundreds of thousands of dollars.

So whilst it is clear that pay per click advertising can be of enormous benefit in the right area, it is important to be wary of potential issues that can crop up, particularly where competitors might seek to drain your budget through repeatedly clicking on your adverts (and no, two wrongs do not make a right!).

6 July 2010
by Michael Goulbourn

Tags: click fraud, click laundering, Pay-Per-Click, PPC

Posted on: Tuesday, July 6th, 2010 at 11:52 am - Category: General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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