BIOS: Technology Means Business

Advertising the presence of your Web site via the search engines, better known as Pay-per-Click (PPC) advertising, is becoming one of the most effective and direct ways for businesses to find customers on the Web.

The nature of the services run by providers such as Overture, Google and Espotting means that advertisers can track closely where their budget is being spent, how many clicks they are receiving and therefore how effective their campaigns are. Yet, there is a potential fly in the ointment for PPC advertisers which relatively few are actively aware of, and even fewer in a position to prevent - the problem of click fraud.

Click fraud is the inevitable by-product of PPC advertising. If a business is running a campaign with Overture, Google or any of the other service providers to promote and sell products from its Web site, each keyword included in its campaign has a value attached to it which determines how much the advertiser pays when it is clicked on.

While PPC offers a great deal of measurement and control for the advertisers, what it cannot determine is the motive of the people doing the clicking. Most clicks are from genuine customers or people seeking information for good and proper reasons, but when a surfer clicks on an ad with the sole intention of maliciously spending the advertisers budget, then we're into the realms of click fraud.

The difficulty for any PPC advertiser is in detecting the risk of click fraud to their own PPC campaigns in the first place and what to do as a result. Many people simply assume that they're not going to be affected, yet research indicates that as much of 10 per cent of the hits received by any PPC campaign could be fraudulent - in many cases this could be a lot higher.

At particular risk are campaigns with a large number of generic key terms as they are easy targets for the fraudsters. Making key words and terms as specific to the business as possible can help to stifle instances of click fraud to negligible levels, while at the same time improving click through and conversion rates. To a certain extent this is as a result of badly designed and executed PPC campaigns and businesses need to make sure they bear this in mind when looking for external help to run a PPC campaign.

The service providers are certainly aware of the issue, and all provide information to advertisers to explain how they work to keep the issue under control and protect their customers from click fraud. In general terms, the service providers rely on technology to detect and halt instances of click fraud, and describe 'systems' they have put in place.

It would be impossible for them to effectively police every one of their millions of accounts with human intervention, so to a large degree they are forced to rely on techniques to spot patterns of misuse, and then block them. They also generally offer compensation schemes which are designed to ensure that their advertisers don't end up paying for clicks that came about as a result of fraud. Yet these research figures show that far from preventing click fraud, there is huge potential for episodes of click fraud to slip through the net altogether.

Despite the best efforts of the service providers, there is still clearly a risk. There are products available which claim to help stop click fraud - searching the Web under 'click fraud' will reveal any number of solutions which claim to either monitor or prevent click fraud. Some of these are very useful and can help you to spot trends which can indicate fraud is taking place, but in general, it's a good idea to check a number of indicators.

Look for patterns in PPC log data. If you see clicks from the same IP address using the same keyword in quick succession then you can be pretty sure they are as a result of click fraud. You can use this information to report to the service provider and secure a refund. Another key point is to make sure you report any suspicions.

Spread the risk: using the daily budgeting features of Google and Overture to spread your appearances and budget throughout the day and can help prevent a concerted attack on your budget over a short space of time. You should also look at conversion rates. If you are receiving a large number of hits and very low conversion on your site then that could be an indicator that click fraud is a problem. On the other hand, it could also show that your site is very poor at selling but it's still worth monitoring.

Web site traffic analysis software can help you see what visitors are doing once they arrive at your site. Again, if this indicates that there are a large number of visitors arriving at the landing page/home page, not going anywhere else and then leaving the site very quickly, this is another good indicator of click fraud. Combining this with some of the other clues can help complete the picture.

Ultimately, every advertiser does have a role to play in protecting themselves against click fraud, even though many would argue that the service providers have the responsibility.