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Click Fraud: Somebody Is Cheating You

  |  January 11, 2005   |  Comments

Click fraud means someone is cheating you and your clients. How it works and how to work around it.

Click fraud has been discussed among the affiliate and search engine marketing (SEM) communities for several years. Yet many online media buyers are unfamiliar with the term. Admittedly, when I began researching this topic, the first thing I learned was that I've got a lot to learn about click fraud.

I'm willing to bet you do, too.

Why is click fraud important? Simple: Click fraud means someone is cheating you and your clients. If we're vigilant protectors of our clients' interests, that should be important to us.

Click fraud is the practice of artificially inflating the number of clicks or conversions in an online campaign. This often occurs in search and affiliate marketing. The problem hasn't been discussed much outside of those environments. But click fraud potentially extends into any performance-based display advertising environments.

How prevalent is it? I've seen different figures stating up to 10 to 50 percent of click activity is suspect -- an astonishing number. In other words, your CPC (define) and cost-per-acquisition (CPA) buys are potentially half as effective as they could be because of fraud.

Who's stealing from you and your clients?

  • The amateurs. Kids or people with no social lives set up small Web sites and become a part of an affiliate network or Google's AdSense program. To generate a little income, they get with other small site publishers and click on each others' ads.

  • The pros. Unethical and criminal publishers set up elaborate Web site networks and automated systems (bots) to generate fraudulent clicks, conversions, or both. In addition, reportedly programs have been set up in places such as India, Russia, and China, where people are paid to click on ads.

  • Your competitors. Believe it or not, sometimes your competitors want so badly to win, they resort to clicking on your paid search listing or within other performance-based environments just to drive up your advertising costs.

How can you prevent click fraud? For the most part, companies offering solutions are focused on the affiliate and search marketing arenas. I predict they'll expand their services to encompass performance-based display advertising very soon.

Here are some ways to get ahead of the curve:

  • Be more informed. Search on ClickZ for "click fraud." It's a great place to start. And keep an eye out for the latest news regarding the problem.

  • Implement tools. Click Auditor and WhosClickingWho are two.

  • Hire an expert. Companies such as Alchemist Media and ClickAssurance.com help you audit SEM campaigns to identify evidence of click fraud. The same sort of triggers they look for in SEM campaigns can be extended to other media.

ClickAssurance is an Internet security firm specializing in preventing click fraud. It audits SEM campaigns on contingency. If it finds evidence of fraud, it negotiates a rebate with the search engines. ClickAssurance is compensated with a percentage of what it gets back for you and your client.

I met with ClickAssurance's Jorge Zuniga for a short lesson on what click fraud means to our industry. His message can be summed up in one of the first things he shared, "Click fraud is a much bigger problem than people think. It's unlikely that we can prevent it altogether. But it can be controlled."

ClickAssurance hasn't yet addressed performance-based advertising beyond the search realm. Yet Zuniga assures me it's something his technical team has taken a keen interest in.

Ideally, big third-party ad servers will buy companies that specialize in the detection and prevention of click fraud or build the capability in-house. It would be so convenient if all the auditing necessary to prevent click fraud could be done in one place. For example, when this problem is detected on a campaign and the advertiser is owed a credit from the publisher, it could be handled in much the same way we currently handle other discrepancies.

Click fraud is something of a ticking bomb and carries the same sort of reputation-besmirching potential as pop-ups and spam. If we address the issue now, we can get a handle on it before the industry panics. The last thing we need is yet another issue that causes people to lose confidence in online advertising.

There's a lot to learn about click fraud and how to control it. The good news is there's a lot of information out there on the topic. The best places to start are affiliate and search marketing sites and forums. The important thing is you be the one to bring the issue to your clients' attention, as opposed to them asking you about it.

Let me know how it goes.

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Pete Lerma Pete Lerma began his advertising career in the traditional side of the business, where he spent six years managing accounts for clients such as Coca-Cola and Subway. He then realized interactive marketing was where it's at and, in 1998, joined Click Here, The Richards Group's interactive marketing division. During his tenure at Click Here, he's forged relationships with major online publishers, networks and technology companies, and these relationships contribute to his perspective on the interactive marketing industry. As Click Here's principal, Pete oversees accounts for high profile brands including Atlantis, Hyundai, Travelocity, and Zales. His group has won numerous awards for their strategic and creative work, including recognition from the IAB, Ad:Tech, The One Club, Graphis, and Communication Arts. Pete serves on the board of directors for the Dallas/Fort Worth Interactive Marketing Association and also contributes to the marketing blog ChaosScenario.

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