Click Fraud to Watch Out For

Pay Per Click Advertising has gone a long way from being a brilliant idea to a multi-billion dollar industry. Google alone accounts most of its 2006 revenue of 6.1 billion to Pay Per Click advertising.

More Than $600 Million Dollars Lost to Click Fraud

It may come as a consequence that where there is a lot of money involved, a lot of fraudsters and scammers flock. The phenomenal growth of advertising on the internet has spawned several party-crasher tricks perpetuated by some unscrupulous individuals and organisations who prey on legitimate industries like Pay Per Click advertising. Click fraud has been known to be a menace to this business as some believe that more than 10% of all traffic generated by Pay Per Click advertising come from Click Fraud. Although nobody is quite certain about this, a lot still contend that this is so. If substantiated, this could mean some $600 million dollars lost to internet scammers and fraudsters in 2006 alone.

Pay Per Click advertising Fraud is known by two ways or reasons of divesting online businesses of precious Pay Per Click advertising dollars:

To earn commissions – individuals or organisations have devised some ways to generate a lot of clicks on Pay Per Click advertisements either by doing it themselves or by hiring people or using machines or software. There is awareness among search engine marketing firms that some organisations of syndicate operate by maintaining a network of “Paid to Click” individuals who are contacted by e-mail. A lot of Pay Per Click advertising dollars are lost to these bogus commissions.
To disable a rival firm’s’ marketing efforts – Click fraud can also be used by rival companies against its closest competitor by siphoning off its budget and having people who have no real interest in their business click on their paid links.

Defenses against Pay Per Click Fraud

The guy who pioneered the Pay Per Click advertising model, Bill Gross, is known to be aware of this danger even before Yahoo! bought his firm (now known as Overture) in 1998. Gross actually devised a three-layered defense system:

          1. Filtering out of clicks and identify those that come from known scammers
          2. Use of software and statistics to spot dubious click patterns
          3. Cooperation with advertisers by analysing lead patters.

Click Fraud is here and it cannot be denied. Google in a settlement case with a gift shop in Arkansas about Pay Per Click advertising fraud, paid some $ 90 million and some observers even say that Google had it easy with this case.

Yahoo! on the other hand made some moves in intensifying its vigilance against Click Fraud and in protecting the profitable Pay Per Click advertising business by teaming up with a fraud detection firm call CheckMate. In addition, besides offering refunds for clicks that are deemed Click Fraud, Yahoo! also agreed to appoint a “traffic-quality advocate” to champion the concerns of advertisers.

While Yahoo! and Google have taken the issue seriously by making considerable steps in addressing Pay Per Click advertising fraud, it remains early to see if these measures are enough to make advertisers feel safe.

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