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Click Fraud NYTimes Article
ichthyous

10+ Year Member



 
Msg#: 3206 posted 1:40 pm on Oct 18, 2004 (gmt 0)

An interesting article in the times about click fraud. Maybe this is old news to some of you, but I found it interesting:

[nytimes.com...]

"It's really any click initiated on a cost-per-click ad that is made without there being a possibility of a legitimate site-visit or a transaction to occur," said Jessie C. Stricchiola [webmasterworld.com], the president of Alchemist Media, a California company that helps advertisers recoup cash lost to the practice. "It's a really serious problem for the advertisers it affects."

 

amznVibe

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 8:04 pm on Oct 18, 2004 (gmt 0)

Why do I get the feeling it's the innocent webmasters that get hurt in the process of detecting click fraud?

Anyone have the ip range for Alchemist Media for banning? I don't think I want them around and risk losing my ad accounts due to a bad determination. (Oh wait, nevermind, it's just yet another SEO consultant with an added service).

bakedjake

WebmasterWorld Administrator bakedjake us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3206 posted 8:25 pm on Oct 18, 2004 (gmt 0)

"Sometimes it just makes people feel good to know they're costing their competitors money," Ms. Stricchiola said.

Every single article on click fraud written to this point has completely missed the boat on why click fraud happens.

"It's a really serious problem for the advertisers it affects."

It's also a VERY lucrative industry. The credit card companies know how it is - this is search industry's version of chargebacks.

Sound skeptical? You bet I am.

hunderdown

10+ Year Member



 
Msg#: 3206 posted 8:34 pm on Oct 18, 2004 (gmt 0)

bakedjake,

The article also said that click fraud happens because some site owners use it to drive up their ad revenue... Is that the point that you say every article has missed? If not, what is?

bakedjake

WebmasterWorld Administrator bakedjake us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3206 posted 8:34 pm on Oct 18, 2004 (gmt 0)

If not, what is?

Reach of your ad vs. competitor's ads.

glitterball

10+ Year Member



 
Msg#: 3206 posted 8:50 pm on Oct 18, 2004 (gmt 0)

The more attention this gets the better, I found this to be a serious problem.

The problem seems to get worse when the bidding gets out of control, which leads me to the conclusion that it is competitors trying to cost their opposition.

That's an interesting point about the comparison to chargebacks. I'm sure many of us have come across Banks that make a nice commission from fraudulent transactions and then add an extra fee for the chargeback.

adfree

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 9:35 pm on Oct 18, 2004 (gmt 0)

Always thought the army of fraud chasers in the GPlex fights a losing battle against the 0s and 1s.

BillyS

WebmasterWorld Senior Member billys us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3206 posted 1:59 am on Oct 19, 2004 (gmt 0)

Why does bidding get out of control?

Why is fraud a very serious problem for advertisers?

Is everyone in marketing stupid? A debatable point.

But when I was heavy into PPC, it was because I made LOTS of money advertising through Adwords and Overture. Fraud clearly exists and I stayed away from programs that did not covert enough to cover the expense. Ah, ROI or net income is the key.

Advertisers participate in PPC because it is profitable. If all fraud were eliminated, guess what would happen to the bids? I bet they would go even higher!

bnhall

10+ Year Member



 
Msg#: 3206 posted 2:04 am on Oct 19, 2004 (gmt 0)

I agree with BillyS. It's buyer beware in PPC land. Advertisers stick with high ROI media and ditch the stuff that's suspect or just doesn't convert acceptably. Natural selection.

idoc

10+ Year Member



 
Msg#: 3206 posted 4:38 am on Oct 19, 2004 (gmt 0)

"cost-per-click ad that is made without there being a possibility of a legitimate site-visit"

There *are* alot of these sites that are thousands of affiliate tracking ppc ad pages... no meat and potatoes of anything materially useful at the sites save for the ads and doorway pages themselves. It does make you wonder exactly how anyone would legitimately peruse the sites and click any of the ppc ads to begin with. I would agree though the market will ultimately decide how much the medium is worth. To me, right now the ppc ads are overvalued.

jcoronella

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 5:54 am on Oct 19, 2004 (gmt 0)

Always thought the army of fraud chasers in the GPlex fights a losing battle against the 0s and 1s.

The problem is from the SE's point of view there are other things that need more resources.

PPC fraud doesn't cost Google, Yahoo, and all the other PPC providers money, just the advertiser.

trader

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 7:49 am on Oct 19, 2004 (gmt 0)

Tried to read the article but NY Times members only. Instantly left the page as soon as that lengthy privacy violating form came up. I hate websites which mandate you join by completing a form before they let you access anything, and personally boycott them all.

It really sucks that I was not able to read the article, especially coming from a public newspaper which is too cheap to let you read an article without getting your info so they can in all likleihood spam you to pay for an online subscription.

IMO, really do not think links like that should even be posted on forums.

adfree

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 8:56 am on Oct 19, 2004 (gmt 0)

PPC fraud doesn't cost Google, Yahoo, and all the other PPC providers money, just the advertiser.

Consequently: the more money they lose in one arena, the more likely they will jump ship and point their attention (advertising dollars that is) elsewhere. Either there will be a quality winner in this particular market or the whole PPC concept will be for the rabbits.

canuck

10+ Year Member



 
Msg#: 3206 posted 8:58 am on Oct 19, 2004 (gmt 0)

I do quite a bit in PPC for several sites, and with all the ROI tools that Google/Overture have out I really don't see what a big deal click-fraud is. To me it's just another factor in determining what your max bid will be.

If there's a lot of click-fraud in a given keyword, then the market should lower its max bid accordingly. Market forces should eventually prevail... although there are always the ignorant Fortune-500 forces at work! ;) And when a competitor specifically targets you... it's all part of the fun of PPC / or you can use the various channels available to complain to Adwords/Overture/etc.

- canuck

kapow

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 5:30 pm on Oct 19, 2004 (gmt 0)

When you (and your competitors) spend 100s per day on CPC clickfraud becomes profitable. Recently I have found evidence that makes me strongly suspect CPC campaigns we manage are prey to clickfraud.

I have decided we will build our own click fraud detector. I will publish openly if I find proof! The search engines are increasingly forcing people to CPC advertising. If they are letting clickfraud happen it should bite them as hard as CPC is biting everyone else.

jcoronella

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 6:11 pm on Oct 19, 2004 (gmt 0)

Either there will be a quality winner in this particular market or the whole PPC concept will be for the rabbits.

I really don't think so. Condsider:

- Most advertisers operate on a CPA basis - they know what their cost of sale is and it is independent of fraud.
- The demand for their products is independent of click fraud.

The amount of advertising dollars in a given channel (PPC) is constant and is independent of click fraud.

TotalSpend = RealProductDemand * CostPerSale = (RealClicks + FraudClicks)*CPC

What changes is the CPC. Click fraud will drive down CPC's, but not the total dollar spend because the same number of real clicks, cost per sale, and the product demand remain relatively constant.

Click fraud or no click fraud, the loser is the advertiser who does not lower his CPC in real time in response to click fraud. Google and Yahoo make the same cash - more if the merchants don't keep up. What's worse is that if the source of the click fraud is your competitor, he wins big with a lower CPC but no fraudulent clicks.

LadyTi

10+ Year Member



 
Msg#: 3206 posted 11:57 pm on Oct 19, 2004 (gmt 0)

I am sure you all are aware that there is a SEPERATE entity on the net that revolves around click fraud. some people are making darned good money stealing your advertising dollars;)

teenwolf

10+ Year Member



 
Msg#: 3206 posted 12:03 am on Oct 20, 2004 (gmt 0)

Click fraud is definitely a problem but a lot can be detected with minimal effort. I have had many dollars refunded after pointing out "suspicious" activities. I know I can't catch it all, but every little bit helps.

A small investment of time and resources can go a long way here. I think of it like installing security devices to detect theft in a store. It's not the most exciting thing to spend money and time on but it is probably necessary in many cases.

cabowabo

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 2:54 am on Oct 20, 2004 (gmt 0)

Click Fraud will happen, just as shoplifting will happen. Advertisers take this into account and when they watch their ROI, they know how much they can afford to bid. It is quite simple. As as stated eariler, if you remove click fraud, that will just increase the amount of bids across the board, as advertisers will now be able to afford more per click.

It's simple really...

Cheers,

CaboWabo

WebGuerrilla

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 8:16 am on Oct 20, 2004 (gmt 0)

You can't compare click fraud to shoplifting.

When someone shoplifts, the store absorbs the loss. With click fraud, the store profits from the theft.

Search engines have put no real effort into curbing the problem because it isn't in their economic self-interest to do so.

cabowabo

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 5:59 am on Oct 21, 2004 (gmt 0)

I disagree. It is the same issue. When someone shoplifts, the shoplifter profits and the store absorbs the loss. When click fraud occurs, the publisher who performs the click fraud profits and the advertiser absorbs the loss. It is the same.

You are right, SEs have no motivation to stop it.

Wireless access in Cabo has never been better ...

ignatz

10+ Year Member



 
Msg#: 3206 posted 6:02 am on Oct 23, 2004 (gmt 0)

In the PPC world, losses are basically passed on to the advertiser unless the fraud is caught.

The Walmart metaphor doesn't really work.. it would be like charging the supplier for products that were shoplifted. That's not the way it works for obvious reasons.

What effect does click fraud have in the long run? Advertisers will opt out of programs where they are not generating good conversion rates.

For example if advertisers en masse lose faith with adwords, Google will be in real danger. Therefore I can't imagine anything else more important to a PPC provider than the confidence of their advertisers.

This dovetails nicely with my major issue with Google: so far, there is no evidence that their revenue model is anything else but a monoculture.. but that's another thread..

teenwolf

10+ Year Member



 
Msg#: 3206 posted 11:06 pm on Oct 23, 2004 (gmt 0)

Therefore I can't imagine anything else more important to a PPC provider than the confidence of their advertisers.

I agree 100%. However, someone needs to pass on this thought to the SEs themselves. They don't seem too concerned at this point and almost brush it off simply because they can.

Is it me or does it seem like customer service at the SEs is going downhill?

kapow

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3206 posted 4:52 pm on Oct 25, 2004 (gmt 0)

SE's... almost brush it off simply because they can

I think this is true because:
1.) Google has the majority market-share of search.
2.) Google made it much harder to rank unless you pay them.
3.) Thats why a stampede of sites are rushing to pay Google [webmasterworld.com] just so they can continue existing on the web.
4.) Few of these sites know about serious conversion tracking, and fewer still could identify and make a case for click fraud.

If a few people could expose how much click fraud is going on the PPC engines would be hit hard by lack of confidence in their services. They would have to use some of their profit to fix it, instead of all the desperate sites/companies paying for click fraud.

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