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September 29, 2008

How to Protect Yourself from Click Fraud

Click Fraud occurs in pay per click advertising campaigns when somebody clicks on an ad over and over again in a deliberate attempt to either:

  1. Make the advertiser pay for multiple click-throughs; or
  2. Earn the owner of the site (where the ad is featured) commission on click-throughs

Click fraud can occur on both a small and large scale. For example, say one of your competitors notices your ad that happens to be running for the same keywords as they are bidding on. They might click on your ad out of curiosity to see what type of landing page you are using and compare it to their own. That’s a form of click fraud because your competitor has no real interest in your offer. Of course this happens all the time in a competitive market and the cost is so small that the fraud usually goes undetected.

Accidental click fraud can occur when publishers click on ads within their site by accident. But what happens if your competitors decide to play dirty pool? What if they want their ad to rank above yours at all costs? They might decide to continuously click on your ad/s and drain your daily click budget or force you to lower your keyword bid. Unfortunately, such unscrupulous advertisers exist, particularly in the highly competitive industries such as retail and tourism.

More sophisticated fraudsters may be affiliates of the pay per click operator and try to make money for themselves by generating thousands of clicks on your ad. To avoid detection, people engaged in large scale click fraud will often run scripts which simulate a human clicking on ads.

The major PPC providers all claim that they monitor campaigns for click fraud and reimburse account owners for any false clicks, but the fact is that click fraud is a major issue. How major? Let’s take a look at some statistics.

Statistics on Click Fraud

Click fraud affects anywhere between 15 and 28 percent of search advertisements. According to data released by Click Forensics, click fraud rates for ads placed on content networks, (such as Google AdSense and the Yahoo Publisher Network), reached 28.3 percent in Q4 2007. That’s 28 cents from every dollar going to fraud!

Some industry commentators are skeptical of the accuracy of these stats and the major PPC providers usually deny that true click fraud statistics are anywhere near as high as those published.

When confronted with the figures above, Google claimed that their average “invalid click” rates for AdWords were less than 2 percent. This was later clarified by a post on their Inside AdWords blog stating that the actual figure was less than 10 percent.

However Yahoo revealed a much higher figure of between 12 and 15 percent, representing the average number of aggregate clicks that its Search Marketing click-through protection filters identify, tag and do not bill to advertisers.

How to Detect Click Fraud

So how is click fraud detected? Most click fraud is fairly obvious and all the major PPC providers have fraud detection filters in place to protect their advertisers. If a huge volume of clicks are coming from just one, or a small number of IP addresses, or a single geographic area, this is highly suspicious activity. Clicks that come from the IP address of a publisher or advertiser also look suspicious. IP addresses are easily tracked. In other words, somebody attempting large scale fraud from a single computer stands a good chance of being caught.

But the more sophisticated click fraud requires a more sophisticated detection system. Google has a three stage system:

1) Real-time filters

2) Offline analysis

3) Reactive investigations

In stage one, Google automatically filters most fraudulent clicks before they reach advertiser’s accounts. Google is able to filter out the majority of invalid clicks before reports are even served to the advertiser. Advertisers are reimbursed for smaller amounts of invalid clicks found in stage two. Reimbursements are automatically reflected in Click Quality Adjustments listed on an advertiser’s billing summary.

Stage three is where advertisers are affected by click fraud that has gone undetected by Google. In those cases, an advertiser writes to Google to request an investigation. If Google’s Click Quality team finds signs of undetected click fraud as a result of the investigation, they mark those clicks as invalid and give a refund to the advertiser.

But what can you, the advertiser, do to protect yourself against click fraud?

How to Combat Click Fraud

There are a few ways you can guard against click fraud. Here are some of the most effective:

  1. Avoid the Content Network Unless Experienced

    In my experience, most click fraud occurs on the Content Networks of PPC providers, rather than in the Search Network. That is, it occurs more often on Google, Yahoo and MSN partner sites that syndicate your ads via AdSense and other means. This doesn’t mean that you can’t achieve a good ROI on content networks, but that advertisers often don’t understand how to optimize their ads for syndication. Therefore, if you are just starting out with PPC campaigns, or have a tight budget, I would recommend avoiding the Content Network until you’ve been monitoring your campaign for some months and have a better understanding of your audience and expected click-through rates.
  1. Block Your Ads from Certain IP Addresses

    In Google AdWords, you can block certain IP addresses or a range of IPs from seeing your ads. You do this via the IP Exclusion Tool. This is particularly handy if you suspect your competitors or affiliates are clicking on your ads and you wish to block them. Of course, to do this you need to know the IP addresses you wish to block. But just be careful that you are blocking the correct IPs, because some host companies have thousands of users on the same IP address.
  1. Block Your Ads from Certain Countries

    You can also control ad syndication at a regional level. When creating your campaign, you choose what cities, regions, countries or geographical areas that you want your ad shown in. By avoiding your ad displaying in the countries where most click fraud occurs, (link to map) you can reduce the likelihood of invalid clicks on your ads. Yahoo offers similar ad control. They offer a feature called Blocked Continents that allows advertisers to prevent their ads from showing in certain countries and regions. If you don’t ship internationally, using these features ensures your ads don’t display to searchers in areas that you can’t service.
    Yahoo Search Marketing is different from Microsoft adCenter and Google AdWords in that country targeting occurs at the account level. So if you target international markets, you may wish to opt for separate accounts, for example one to only show ads in Europe and another account to only show ads in the United States.
  1. Monitor Your Log Files for Suspicious Activity

    Check your log files regularly for any suspicious activity. If you find something, contact the pay per click search provider concerned and provide as much documented evidence as you can collect. Most of the reputable companies are willing to take notice of your concerns and provide refunds where it is clear that you have been the victim of fraud.
  1. Monitor What Sites Send You Traffic

    When running PPC campaigns, it’s critical that you monitor which sites are sending you traffic and how that traffic converts. You can do this via your log files, but the major PPC companies also provide tools to help you monitor this. Conversion tracking is offered by Google AdWords and Yahoo Search Marketing. Google AdWords also recently launched a placement performance report that works with conversion tracking and allows you to see all the websites in the Content Network which are sending you traffic. You then have the option to block sites which are not converting.
  1. Use Negative Keywords

    All three of the major pay per click engines, Google AdWords, Microsoft adCenter and Yahoo Search Marketing give advertisers the ability to block their ads from showing for certain search queries.  The feature is called Negative Keywords.
    For example, if you sell laser printers you might want your ad displayed for the search phrase “laser printers”. But unless you use exact matching, your ad may be displayed for longer irrelevant search queries that use that phrase such as “laser printer repairs”. If you only sell printers and don’t repair them, you won’t want this to happen. Therefore, you can add “-repairs” as a negative keyword to instruct the PPC provider not to display your ad for search queries that include the word “repairs”. While this is not technically a tactic to avoid click fraud, it does reduce the potential number of invalid clicks on your ads.
  1. Block Specific Content Network Sites

    Google AdWords provides a feature called Site Exclusion that allows you to block any website on the content network. This means that advertisers can monitor conversion rates closely over time and use the site exclusion tool to block traffic from non-converting sites. This works well for sites that you suspect of causing click fraud. If you detect large amounts of non-converting traffic from particular sources, you can block it quite easily. It should be noted that site exclusion occurs at the campaign level so you’ll need to enter each site you wish to block into the exclusion tool for each campaign.
  1. Monitor Invalid Clicks

    By importing your log files into a reliable site analytics program and tracking your site statistics on a regular basis, you can keep tabs on your PPC traffic and compare it to reports from your PPC provider. Often, invalid clicks will show up in your analytics but not be reported in your campaign profile. In order to track down any invalid clicks, you should compare the clicks you paid for versus the ones that your analytics program show you received. If you run AdWords campaigns, you can also compare statistics with the built-in Invalid Clicks Report which shows you how many clicks your ads attracted that Google determined as invalid and for which you were not charged. This is a good place to start any click fraud investigation.

Follow these steps, detect invalid clicks before they occur and protect your campaign ROI from Internet fraudsters.

About the Author:

Article by Kalena Jordan, one of the first search engine optimization experts in Australia, who is well known and respected in the industry, particularly in the U.S. As well as running a daily Search Engine Advice Column, Kalena manages Search Engine College – an online training institution offering instructor-led short courses and downloadable self-study courses in Search Engine Optimization and other Search Engine Marketing subjects.