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Click fraud in PPC advertising

There has been a lot of publicity recently about 'click fraud' in PPC advertising campaigns being run on tools such as Google AdWords and Yahoo! Search Marketing. Click fraud involves the action of clicking on a company's adverts purely to increase their costs and is carried out either by competitors, software 'bots', and even in some cases there are reports of Indian companies employing people to click on adverts in return for a small fee.

There is much contention about how prevalent this practice is. Some claim that it is responsible for anything between 5 and 15% of all clicks, although we believe that the issue is more of a concern to high-spending companies in the US than those in Australia.

Although the PPC providers could make extra money from this practice, it is clearly in their best long-term interest to prevent this type of activity and they do have a range of measures in place to fight it. These include monitoring the IP address that clicks originate from and placing time restrictions on the level of clicks from a single source. They also claim to have systems to identify 'unusual' click behaviour.

Google has published some FAQs about how they deal with invalid clicks and whilst Yahoo! Search Marketing don't disclose any of the methods they use, they do state that this is one of their 'most important issues'.

We have had cases where Google and Yahoo! Search Marketing have notified us about 'invalid' activity on some accounts and refunded some costs. However, no system can be foolproof and it is likely that some costs will be 'wasted', particularly on higher bid cost terms where competitors may occasionally use the link for any number of reasons.

Ultimately, although we can't ignore the fact that some 'click fraud' taking place, we need to build this into the costs of a PPC campaign and how effective it can be. That's why we always advocate that, whenever possible, an advertiser uses the conversion tracking code that is made available and measures the cost-effective of their activity so that bids or terms can be adjusted if they are seen to not be cost-effective.

If you have a PPC campaign running, or are considering this in the future and would like to know more about measuring the cost-effective of this activity, please contact us now for more information. Alternatively, request our FREE marketing assessment to discover what other online marketing opportunities may exist for your site.