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Google Click Fraud: BEWARE!

More and more companies are becoming interested in ‘search engine marketing’.

It’s a wise decision. ‘Everybody’ uses search engines nowadays. Both the general public and an estimated of 80%+ of business buyers look to search engines to deliver ‘an answer’.

If your website can be easily found, especially in Google then your company can maybe satisfy searchers at their point of need.

Essentially there are two routes open to you, if you want more search engine traffic (visitors).

The organic approach: This requires a combination of on and off page activities to raise the ranking of the website when someone searches for a keyword or phrase that matches the content of the your website. This process is called search engine optimisation…or optimization if you prefer the US spelling.

and

The paid approach: In Google’s case you can buy Google AdWords. This process involves bidding for keywords. The higher the bid, the higher position for your website. You only pay per visitor received.

Many people prefer the paid approach because, at first glance, it seems easier and cheaper but thats not necessarily the case. In fact, in my experience, it is rarely is the case. It’s just ‘easier to get started’, that’s all.

In our opinion people should use a combination of the two techniques: organic is used for long term results and ‘pay per click’ for words and phrases that are too competitive to win organically. Also the paid approach is sometimes good for testing the conversion rate of visitor to action too (more on that another time)

But wait…

There is a BIG problem with Google Adwords and with the similar pay per click options available from Yahoo etc.

The problem? FRAUD !!!

Before paid search advertising can become a durable marketing option Google , Yahoo et al must TRANSPARENTLY deal with click fraud.

Every time a searcher clicks on an ad, the advertiser pays Google. But a, not so secret, niche industry has been gathering pace: individuals, competitors and organised agencies (click farms) are offering unethical and damaging services.

Some of these “clickers” are trying to inflate the overall cost of their, or their clients’, competitors’ advertising. Also publishers (that carry the Google ads on their sites to earn revenue) are artificially increasing the results by click-click-clicking on the ads they show.

Click fraud is especially worrying and costly to the advertiser if ‘hijacking software’ is being employed: ‘click generating software’ is easy to make or buy online and has the ability to ‘control’ a computer without the user being aware.

The infected computer can click on targeted ads one, two, ten times a day without the owner’s knowledge. Factor the scale: hundreds of controlled computers creating a ‘robot army’ controlled by agents of your competitors. Pretty scary.

This is not paranoia talking, it’s very real, and something I observed starting years ago, back in 2002 I first got worried. Even Google themselves used to admit this was a big problem as reported at CNN.com in 2004:

“I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model,” Google Chief Financial Officer.

If you are a professional search marketer you already KNOW about click fraud but many agency people still turn a blind eye to it 🙁 which means advertisers are often paying large sums on money..for nothing.

Estimates run at up to 25% of budgets are fraudulently spent.

This is BAD NEWS. It casts a black mark on MY industry and means that in future these people who have had their fingers burnt might stay away from search marketing which would mean lost opportunities for them and potentially lost customers for altex. Not good.

So what does Google have to say when asked: How bad is click fraud? Numbers please.

The answer : No detailed comment. No specific numbers.

Google, of course, now denies there is an issue at all and a spokesperson recently replied (by email), when asked by Barron’s Online to comment on the issue:

“Our expert teams and technology filter out certain invalid clicks before they even reach the advertisers’ bills. When we become aware that customers have been charged for invalid clicks, we work to refund advertisers as quickly as possible.” She added that losses associated with invalid clicks are “non-material.”

Non material! Non material to who? Google is getting pretty arrogant these days…with other peoples money!

So what can you do?

1. Factor in 25% for fraud if you do use they pay per click options
2. Focus on the organic approach (its better in the long run and the traffic is FREE 🙂 too)
3. Use pay per click short term, vary the campaigns, do not leave ads running ‘forever’.
4. Consider employing a team like Click Defense who are reported to allege that Google is not cracking down on click fraud.

Consider these:

1. The search engine market is super competitive
2. Google stock is overpriced (come on, you know it’s true)
3. Cost per click prices are crazy (there is a lot of dumb, lazy money being spent)
4. The smart internet marketing/advertising agency money is leaving pay per click and focussing on organic approaches
5. Fraud is on the increase

Got shares in Google? Sell them unless you want some sleepless nights.

Just in case you wondered, no, altex does not offer paid search marketing services as standard. Yes there is a time and place for pay per click but its needs careful consideration and day to day management for the serious level advertiser. We only recommend pay per click when the situation demands it and not as a panacea for all search marketing challenges.

Be warned!

And so which search engine do I use?

Google of course, it is still number one for me, but I also useTEOMA and AlltheWeb (A Yahoo company but with a simpler/better feel..for me) from time to time.

Old news but also interesting: Google sues and Google sued for $5million !!

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There are 3 comments .

Priit Kallas

Priit says: Your opinion is interesting but you don’t have any real statistics to back it up.

My reply: It’s true. I do not have statistics because we do not run Google Adword campaigns. But others do. As John Slade (leader of Yahoo’s click fraud protection effort) points out:

“If you’d told me five years ago that I would be talking about ‘fake clicks,’ I would have told you that you were crazy. Now it’s all I spend my time on.”

In a recent article in Wired there was also an interesting comment : “Bill Gross, the man who invented PPC back in the late ’90s when he presided over the startup incubator Idealab, has argued that, despite the cleverness of the various methods used to fight it, click fraud will continue to cast a shadow over PPC advertising. Ultimately, he believes, advertisers will switch to another model, which he calls cost-per-action.”

Cost per action IS an area that altex recomends and one that I have advocated all my ‘internet career’.

Priit also said: But even so the point is the price of the client not the click and this means that the price will just factor in any fraud or other irregularities and the end result will be the same as without fraud.

My reply: Yes, in my original post I say that people should factor in fraud. Also I agree there IS a place for pay/per/click (test conversion ratios, short term promotion, strategic words when SEO is not an option- for various technical/legal/competitive reasons). I just want people to be aware of click fraud and judge the importance for themselves. In my experience click fraud leads to a distortion of statistics which can negatively influence other search marketing strategy decisions.

Not everyone measures click stream activity on their site (post click visitor-to-action analysis) so they do not necessarily know which search terms are producing end clients. Also when the purpose of the campaign is branding post click analysis is rarely studied – although yes it should be.

Further Priit comments on this subject can be found on his blog (Estonian language) .

PS As Priit says, we have discussed this subject before but he can’t see the problem with click fraud.

Reply »
Robin Gurney

Click fraud was the top topic at the Search Engine Strategies Conference & Expo in New York last week.

Amongst other things Carol Krol from B2B Online states: “According to data released in December by the nonprofit Search Engine Marketing Professional Organization, the number of those who believe it is a serious issue has tripled in the past year, and two out of five advertisers and about 40% of the agencies surveyed have tracked fraud in pay-per-click campaigns.”

Read the rest of Carol’s article here http://www.btobonline.com/article.cms?articleId=27207

Reply »
Robin Gurney

Google Settles ‘Click Fraud’ Suit for $90 Million
March 2006

“We have said for some time that we believe we manage the problem of invalid clicks very well. By far, most invalid clicks are caught by our automatic filters and discarded before they reach an advertiser’s bill. And for the clicks that are not caught in advance, advertisers can notify Google and ask for reimbursement.”

Nicole Wong, associate general counsel for Google.

Red Herring is one of many covering the story: http://www.redherring.com/Article.aspx?a=16020&hed=Google+Click+Fraud+Settlement&sector=Industries&subsector=InternetAndServices

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