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Click Fraud Alert: What You Risk with Pay-per-Click

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If the Internet is important
in your marketing program, you may be using, or thinking of using,
pay-per-click advertising—aka PPC or sponsored links—with Google, Yahoo, or another
major search engine. No more worrying about whether your Web site will show up
on the first or second page of the search engine’s listings. No more worrying
about what text from your site will show up in any given search. Even better,
you’ll pay only for surfers who click through from the search engine’s site to
yours.

 

But wait. What about click fraud?
Never heard of it? It’s what happens when someone repeatedly makes bogus clicks
on a sponsored link. Recently, click fraud has led to class action suits
against search engines. Google settled one case in March in Arkansas for $90
million; another case is scheduled to go to court in California in May.

 

The two most prevalent types of
click fraud are competitive sabotage, which can quickly drive your PPC ad costs
up to a level you can’t tolerate, and affiliate spam, which involves site
owners clicking on ads that appear on their own sites to boost their share of
ad revenue from search engines such as Google or Yahoo. (Whether search engines
accurately count clicks—legitimate or bogus—is an issue too, but not part of
this discussion.)

 

Competitive sabotage may be used
by malicious competitors, unhappy customers, disgruntled employees, and others
who want to hurt a PPC advertiser financially. As Brent Sampson explained in
the August 2005 PMA
Independent
(see “Pay-per-Click Book Promotion: Seven Tips for
Success,” page 31), “With click fraud, an advertising budget can be exhausted
as quickly as overnight—and potentially make Internet advertising too expensive
for a business.”

 

Affiliate spam occurs on sites
that carry sponsored links from a search engine and are compensated by a search
engine, which splits its revenue for each click-through with the hosting site.
Many thoroughly respectable companies include sponsored links on their sites,
and there’s no reason to suspect that they’re inflating the number of clicks.
But some Web sites apparently exist primarily to generate click-through
revenue, and they attract advertisers by claiming high click-through rates, which
they may create themselves.

 

“Get Paid For Link
Clicking,” It Says Here

 

Can’t visualize someone sitting at
a computer, clicking repeatedly on a certain ad? That isn’t always how it
happens: there are software programs to do the dirty work. They’re called
“traffic simulators,” and they make claims like, “The fake hits and traffic
appear 100 percent realistic—you can’t tell the difference between this traffic
and real traffic!”

 

But, yes, manual click fraud takes
place too. “Web surfers! Get paid for link clicking” and “Easy same-day pay”
are typical inducements on the Web. Type “get paid web click” in Google.com and
you’ll find lots of opportunities. Some have borrowed multilevel marketing
strategies: “Earn more by referring your friends. You’ll get 5 percent of the
points they get and 2.5 percent of the points their referrals get.” Type in
“get paid rupees web click” for a look at how even click fraud is going
offshore.

 

This is a no-brainer, you might be
thinking: certainly the search engines can implement click-fraud filters that
stop multiple clicks from the same email address—or at a minimum, not charge
advertisers for them. Unfortunately, you’d be wrong. As the recent lawsuits
against Google.com indicate, click fraud is a growing problem, and the search
engines are taking criticism for both their filtering software and their
advertiser customer service.

 

Some PMA members say they have
been charged for more clicks from a single search engine than their Web sites
received from all sources in the same time period. They are suspicious about
search engine policing of the problem because the search engines have no
incentive to reduce click-throughs. As Gail Howard of Smart Luck Publishers
says, “Google could fix this problem by not allowing one person at one location
to click on a keyword every minute.” But it doesn’t, she says, because it
“cashes in on these fraudulent clicks.”

 

A report by Benjamin Williams of
Quotationworld.com is typical of click fraud complaints by PMA members. In one
day alone, he was charged for more than 1,500 click-throughs on Yahoo, far
exceeding what his firm had authorized for the entire month. As the deluge
continued, Yahoo customer service shrugged the problem off as a system
migration snafu and promised Williams a refund. It never materialized, and his
subsequent calls to Yahoo were ignored.

 

Advertising on Google resulted in
similar problems. “I noticed a large number of click-throughs from a strange
little Web site,” Williams says, adding that the traffic patterns he observed must
have been “contrived for the profit of the referring Web site. Many
click-throughs lasting one second? It’s just too strange.” But Google didn’t
share his concern.

 

Smart Safeguards

 

So what’s the solution?

 

Not all of us can swear off search
engine advertising. For publishers dependent on direct-response ads, Google and
Yahoo may deliver as much as a third of their sales—in addition to the sales
generated by free listings on the search engines.

 

If you are using pay-per-click,
here’s what some veteran advertisers recommend:

 

Stay
with the major players.
Google and
Yahoo, although not trouble-free, are the search engines that attract the most
users. Members reported more fraud problems with second- and third-tier search
engine advertising.

 

Select
key words carefully.
Choose words
or phrases specific to your book or business so that you attract people most
likely to buy your products or services.

 

Limit
the number of key words
to reduce
your costs.

 

Limit
what you bid for key words.

Especially when you’re testing pay-per-click advertising, 10 to 15 cents per
click is all you can afford if you’re selling a book, advises Ron Pramschufer
of RJ Communications, citing years of search engine experience.

 

Monitor
how often your ad appears.
One PMA
member says he tried sponsored links on Google.com for six months but got no
leads and couldn’t get his ad to show up when he entered his key words.

 

Monitor
your click-throughs.
Install
“click fraud detective” software or subscribe to a service that lets you
compare the number of clicks you pay for with the number of visits your site
receives.

 

Identify
trends in click-throughs
and
report suspicious increases to search engines immediately. Be polite but
persistent when you contact customer service staff.

 

Budget
for some click fraud.
Travis
Bradberry at TalentSmart assumes some fraud and some glitches in routing
click-throughs to his site, because he’s paying for more clicks than his site
counter registers. Despite this, however, he says that he paid only 10 cents
per click-through in February and that about 1 percent of those clicks resulted
in solid leads or sales. And he estimates that his PPC ads generate 10 times
the leads TalentSmart gets from trade journal advertising.

 

Analyze
leads and sales carefully.
Of the
229 click-throughs Tim Perkins received in the first six weeks his Book One
short-run bindery used Yahoo this winter, 11 percent requested quotes. Howard
of Smart Luck attributes 29 per cent of her January and February sales to
pay-per-click. Keith Pascal at Kerwin Benson Publishing reports that he’s had
as many as eight sales from one $30 billing for pay-per-click—and three or four
billing periods some years with no sales at all. Other reports indicate that
pay-per-click is not the best way to reach every market: some PMA members
generated few leads and even fewer sales. Said one: “We were unable to track
one sale—one sale!—to PPC!”

 

Explore
associates programs.
Some
publishers use the pay-per-sale concept pioneered by Amazon.com and pay other
online retailers for referrals that result in sales. These arrangements are
often negotiated on a case-by-case basis; commissions range between 75 cents
and several dollars per book.

 

Summing up, pay-per-click
advertising requires knowledgeable and vigilant monitoring as well as
commitment to a budget and careful analysis and planning of key words. Unlike
some other media, the Internet seems to be a rapidly changing advertising
environment, with new opportunities, new challenges, and new threats emerging
almost daily. As with everything else in any business, the more attention and
effort you invest, the more effective you are likely to be.

 

Linda Carlson’s first book
was published in 1982. Her most recent is <span
style=’font-size:11.0pt’>Company Towns of the Pacific Northwest
,
from the University of Washington Press. She has worked in book publishing in
Seattle since 1990.

 

 

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