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Click Fraud Internet PPC Advertiser Risk #1
must read
Brett_Tabke




msg:1226866
 3:43 pm on Dec 30, 2005 (gmt 0)

One of the most powerful peices yet on click fruad ran this month on Wired [wired.com].

Pay-per-click advertising is big, big, big business. So are bogus hits on Internet ads. It's search giants against scam artists in an arms race that could crash the entire online economy.

Bill Gross, the man who invented PPC back in the late '90s when he presided over the startup incubator Idealab, has argued that, despite the cleverness of the various methods used to fight it, click fraud will continue to cast a shadow over PPC advertising. Ultimately, he believes, advertisers will switch to another model...

 

limitup




msg:1226896
 7:16 am on Dec 31, 2005 (gmt 0)

On the other side, I can think of various ways to both identify and eliminate them so I disagree that it's impossible to catch well implemented click fraud.

Unless you care to give an example, all I can say is I disagree. :)

That's exactly like saying it's possible to make an unstoppable bullet or unpiercable armor.

I don't see how you can compare click fraud to stopping a bullet. Stopping a bullet is a very specific, scientific and easily achievable task. Stopping click fraud is not.

carguy84




msg:1226897
 9:38 am on Dec 31, 2005 (gmt 0)

most of them come from the viagra / casino / get-rich-now line of products

most of them come from the directories / viagra / casino / get-rich-now line of products

beren




msg:1226898
 2:18 pm on Dec 31, 2005 (gmt 0)

As a casual AdWords advertiser, my perception is that Google has gotten better at controlling the fraud so click fraud is on the decrease with AdWords, not an increase.

I have several AdWords account, and Google has definitely improved in the past year when it comes to reducing fraud. It's still a problem, but not as blatant as it once was. Yahoo continues to have a bigger problem and has many suspect affiliates.

As far as the second and third tier PPC programs: I don't bother any more. The fraud is out of control.

My first reaction when I saw this thread was: is this news?

Martin40




msg:1226899
 4:23 pm on Dec 31, 2005 (gmt 0)

"Dream on ...;)
Curiosity will always have it's place .. your cat and other cats and kittens know this to be true ..~¦)
"

Huh?

(downright charming such replies)

"I don't see how you can compare the two. How in the world are you going to stop the click fraudster who hides behind anonymous proxies, etc.? You can't. All they can do is try to identify "potentially fraudulent" clicks and not pay out on those clicks."

You said it. And you can indentify fraudulent accounts by means of statistical analysis.

Soneone said:

"In addition, most of your advertisers are folks who can not advertise anywhere else on the Internet, most of them come from the viagra / casino / get-rich-now line of products, or something along those same lines.
So your job isn't to provide traffic to Walmart.com
"

And then said:

"For those who want quality, I suppose Overture / Adwords is the route to go"

Marvelous contradiction.

"ALL the folks claiming they earn ten times the money on the Internet than they ever did in the real world, and with hardly an hour's work per day"

Ehh, I'm sorry, but I think this is going in the direction of the battle between the haves and the have nots.

Event_King




msg:1226900
 12:37 am on Jan 1, 2006 (gmt 0)

Affiliate pay-per-conversion

hmmmmm, can't see affiliates saying "yeah, we'll do loads of graft selling you and making you even more famous with no cash upfront and zero risk for your brand Mr Amazon, Ms Debenhams etc etc.

No way hosay! Ain't gonna happen.......

limitup




msg:1226901
 5:14 am on Jan 2, 2006 (gmt 0)

You can't. All they can do is try to identify "potentially fraudulent" clicks and not pay out on those clicks."

You said it. And you can indentify fraudulent accounts by means of statistical analysis.

Yeah, and then publishers drop AdSense just as fast as their eCPMs drop - and find another way to sell their ad space.

IanKelley




msg:1226902
 7:10 am on Jan 2, 2006 (gmt 0)

Unless you care to give an example, all I can say is I disagree. :)

For obvious reasons the last thing I (or anyone else) is going to do it talk about the newest anti-fraud concepts on a public forum.

I don't see how you can compare click fraud to stopping a bullet. Stopping a bullet is a very specific, scientific and easily achievable task. Stopping click fraud is not.

I think the better bullets/better armor cliché compares pretty well to click fraud.

In the world of guns and body armor the two are competing under an equal framework (the laws of physics). As such it's a virtually endless race even though along the way many people have claimed final victory for one side or the other.

On the net fraud and prevention compete under an equal framework of protocols (HTTP, etc..) creating the same potential for an endless race.

However, any future changes to those protocols are going to favor anti-fraud so if either side has the advantage, anti-fraud does.

rjzak




msg:1226903
 2:24 pm on Jan 2, 2006 (gmt 0)

I think PPC fraud is blown out of proportion by traditional media companies who feel pressured by the Internet pricing model.

Someone mentioned that they were putting their PPC money back in their pocket and were going to give traditional marketing a try -> get ready to spend much more per visitor/conversion. Pricing on traditional media exposure is generally much more expensive while generating less results than PPC marketing -- unless you have big bucks to spend.

PPC with Google, MSN and OV is in most markets a cost effective way to market to people who are actively looking for your products/services.

Martin40




msg:1226904
 3:54 pm on Jan 2, 2006 (gmt 0)

I don't see how you can compare click fraud to stopping a bullet. Stopping a bullet is a very specific, scientific and easily achievable task. Stopping click fraud is not.

I think the better bullets/better armor cliché compares pretty well to click fraud.

In the world of guns and body armor the two are competing under an equal framework (the laws of physics). As such it's a virtually endless race even though along the way many people have claimed final victory for one side or the other.

On the net fraud and prevention compete under an equal framework of protocols (HTTP, etc..) creating the same potential for an endless race.

However, any future changes to those protocols are going to favor anti-fraud so if either side has the advantage, anti-fraud does.

I agree. As technologies mature, fraud will be reduced. As for the bullet analogy: the same class of people that produce armor also works on armor piercing bullets, but on the net, and in the long run, fraudsters can never compete with the industry that controls considerable intellectual resources. The deciding factor is that the industry can make the rules, such as the above-mentioned protocols.

BradleyT




msg:1226905
 7:13 pm on Jan 2, 2006 (gmt 0)

If people think fraud is bad now (I don't) wait until that stupid MSN revenue sharing model comes out.

aleksl




msg:1226906
 2:47 am on Jan 3, 2006 (gmt 0)

That Wired article got my nerve too, because of how wrong of a picture it delivers to us, professional webmasters. So we are here to believe that there are bad guys out there clicking from their computers and making 27% of all PPC traffic fraudulent?

What a bogus and misdirected claim, IMHO

Well, let's then keep twisting the truth here for the fun of it, shall we? If that number was anywhere close to the truth, then Google earned more than $1 Billion dollars from fraudulent activity last year.

And Yahoo! too.

Now THAT's news. So here it is Wired magazine trying to convince me and other fellow webmasters, that there are bad apples out there clicking on competitor's ads, when in reality it is a Billion dollar "industry" that feeds Search Engines, and therefore a completely different ballgame.

So what's wrong with this picture?

I am with topsites (see msg#23) here.

StupidScript




msg:1226907
 8:48 pm on Jan 4, 2006 (gmt 0)

So we are here to believe that there are bad guys out there clicking from their computers and making 27% of all PPC traffic fraudulent?

While I agree that click fraud is often hyped by those with a vested interest in its growth, why is 27% so hard to believe?

That ratio basically states that out of every 10 clicks, 3 are 'fraud' clicks. When you consider that bots work tirelessly to execute those fraudulent clicks (your competitor no longer sits around clicking your ads, by the way), sometimes at rates exceeding several dozen per second, it's not so hard to imagine.

And to be outraged at Google's income I would need to believe that they charged avertisers for each and every click ... fraudulent or not ... and frankly, that just hasn't been my experience with them. (Don't forget all of the other revenue sources they have cultivated.)

aleksl




msg:1226908
 7:49 am on Jan 5, 2006 (gmt 0)

StupidScript: why is 27% so hard to believe?

Because we are talking about absence of any information, and over $1 Billion dollars. Are you trying to say that Google lightheartedly passes up $1 Billion dollars? Yeah, right. So what about shareholders, are you going to tell them that your company makes the world a better place by not taking $1 Billion dollars from advertisers?

You know, all this smells funny, that's what it is. And I know How people generate traffic, and it ain't pretty a lot more than it is. And who will speak up and tell us who exactly was responsible for hiring companies in India to click on ads?

So either we drag all this stink out, or stop throwing out unproven unrealistic numbers such as "27% of something is something", agree that the world is not just black-and-white and move along.

dgrati




msg:1226909
 3:41 pm on Jan 5, 2006 (gmt 0)

Now why can't this be done?

1- Goog servers allow only 3 hits to an ad in a certain time frame, such as a day. 3 could be 4 or 5 etc. Goog can determine the max a user clicks the same ad in the same session. After the 3 or X hits, the ad is not shown on the local machine.

Goog could also ban the IP but many users could be genuinely looking for the same item from the same organization.

mymotech




msg:1226910
 4:48 pm on Jan 5, 2006 (gmt 0)

Obviously, the main motivator of click fraud is the publisher networks. Advertisers can simply turn this off on their campaigns and voila click fraud goes down.

If there is corporate "espionage" type click fraud happening on the Yahoogle search pages then obviously a couple of well documented take downs will be enough to scare most people from doing it.

However, if people are afraid to use PPC because of click fraud it only drives PPC costs down because of lack of demand and then the ROI of the companies using it goes up. Keep in mind that Joe Searcher is pretty unaware of click fraud and just clicks on what he thinks will get him where he wants to go.

But the trend in search is to spend ever increasing amounts on PPC, as evidenced by the slow increase in PPC costs over time. Despite articles by Wired and the like, I don't see that trend changing for 2006.

Mymo

StupidScript




msg:1226911
 5:57 pm on Jan 5, 2006 (gmt 0)

Welcome aboard, dgrati.

It's so much more complicated than that, now.

No self-respecting click frauder will use (a) their own machine or (b) the same machine too often. We're talking about click fraud programs that operate from an extremely broad set of compromised machines ... of which there are thousands or perhaps hundreds of thousands operating at any given time.

As an example, from my own organization; over the span of 5 days last September, our log files show over 13,000 clicks on the same paid ad using identical search terms and coming from over 13,000 different IP addresses from all over the globe at all times of day and night and using no particular frequency rate.

How can we expect Google or anyone to detect that as it happens? We can't. We receive thousands of click per day on our PPC ads, and these were just a small percentage of them. At this point in our collective data capture, resource assignment and programming capability, this is too diverse a dataset to be able to efficiently parse.

This type of occurance is up to the advertiser to catch and account for.

If someone who is disdainful of the extent of click fraud would care to put those 13,000 fraud clicks into perspective for me, I'd be glad to take the explanation to my boss.

And, once again I'd like to emphasize that the fact that these robots exist and are successful in executing their commands should be a wake-up call to everyone who uses PPC. It's not a big jump from an AdSense abuser using the program to a malcontent burning the whole system just for the hell of it.

dgrati




msg:1226912
 6:49 pm on Jan 5, 2006 (gmt 0)

Thanks for the welcome stupscript.

PPC is google's flagship. That's how they intend to make $ over harnessing the entire web. If it gets hurt, how else would google make $ over it's core mission?

It could get into other businesses like downloading vdo and PCs and whatever. But those don't represent the core part of their mission. And from chasing google over the years I have found that they, for a change, REALLY mean their mission statement.

So the flagship can be plagued with fraud. What can you do.

First, if the fraud gets so high that it deters genuine advertisers, then goog can work on a software on it's servers that intelligently detects fraud and lets those ads go for free.

Second, goog could also reduce the price at some generic percent it computes but unless that info is publically available and appreciated by advertisers, it's of no use. We will continue to complain and our perception is more important than the reality I guess.

What would be the implications of the first choice for goog, advertiser, consumer, web surfers and the general direction of the web?

That's the brain storm, yoda wonder, he must, about.

Frequent




msg:1226913
 7:07 pm on Jan 5, 2006 (gmt 0)

You can fake clicks but you can't fake conversions (see my aforementioned affiliate model).

The more $G products and "free" tools they can get out there and in use (you know they all have built in tracking functions) the better their conversion tracking becomes and the more easily they can identify and discount fraud clicks.

Adwords Conversion Tracking, Analytics, Google Toolbar, the new Firefox with $G toolbar push, etc., etc., etc.

And when Google finally offers "free" web access world-wide...game over for the fraudsters.

Freq---

wheel




msg:1226914
 9:23 pm on Jan 5, 2006 (gmt 0)

I do think in some industries click fraud is rampant and may approach the 20-30% mark. I'd hate to be someone trying to get conversions on mesethelomia (or whatever the heck that is). However the only way that I immediately see folks making money from this is via adsense - so as noted above, turning off the content network should basically kill the problem - which is why when I advertise in the insurance arena I never advertise on the content network (plus traffic is crap).

If we're just advertising on the search network, I don't see how someone can make money from clicks - which should remove the motivation. As far as competitors taking a run at my ads, that's just background noise that's easily filtered by Google. I don't think anyone would be doing this in a serious way (call me naive), too easy to get caught, too easy for Google to shut down, and way to much bad publicity if an employee ever went sour and went public.

So I agree that the problem is likely overstated. I'd suggest (reaches around my back-end, pulls number from same general vicinity as they pulled the 27% from...) 3%? 5%? maybe even less.

StupidScript




msg:1226915
 9:42 pm on Jan 5, 2006 (gmt 0)

Love the back-end numbers ...

How many of you who are having trouble wrapping your heads around the higher fraud percentages are actually investigating your own log files and PPC reports for fraud?

Please do ... that's where my data is coming from. (There's little room in my back-end ... ;)

aleksl




msg:1226916
 2:11 am on Jan 6, 2006 (gmt 0)

:) there's nothing like a pint of beer and a nice back-end chat

wheel: If we're just advertising on the search network, I don't see how someone can make money from clicks

There's always one BIG someone who makes most of the money from click fraud - GOOGLE.

I don't understand how this is not obvious to the public. Once you accept this, you'd realise that the problem is far more complex than "let's turn off the network, and let Google develop software". Relying on Google (with it's secrecy and 0 information passed back to advertisers) is like leaving a fox guard chicken coop.

I'd say untill there's a class action suit, there's no way Google will release the information.

IanKelley




msg:1226917
 5:46 am on Jan 6, 2006 (gmt 0)

I hate to get involved in a back end conversation but I can't help it...

Are you actually saying that Google is stupid enough to ignore click fraud so they can make a little money in the short term and lose a lot in the long?

Are we thinking of the same company?

aleksl




msg:1226918
 10:55 pm on Jan 6, 2006 (gmt 0)

IanKelley,

as I said, the world is not black and white. "little money" - you mean over $1 Billion dollars a year? I'd love to make that "little".

Google is neither saint nor foe. They can't help it even if they tried - IMHO current HTTP imlementation doesn't provide much protection from attacks, just like current SMTP doesn't provide much protection from spam. Even with all PhDs and enginuety Google will have hard time identifying most click fraud. One wouldn't want to open this can of worms, so they will not comment, otherwise they'd have to admit that they can't identify XX% of click fraud, and loose that revenue.

Again, this is all IMHO.

IanKelley




msg:1226919
 6:24 am on Jan 7, 2006 (gmt 0)

It's definitely true that HTTP wasn't designed with security control in mind. Personally I think that's a good thing, simplicity and openness is what got the web here.

From all that levity (or brevity?) you can get a huge amount of information about a click. Right now the PPC industry is near the beginning of the possible ways to use that information to identify click fraud.

I'd be amazed if Google (et al.) hasn't had fair chunk of their PhDs working on it for quite a while.

wheel




msg:1226920
 9:21 pm on Jan 7, 2006 (gmt 0)

>>>How many of you who are having trouble wrapping your heads around the higher fraud percentages are actually investigating your own log files and PPC reports for fraud?

Please read the TOS for this site. Nowhere does it say anything about posters (myself included) having to back their posts up with facts.

StupidScript




msg:1226921
 5:49 pm on Jan 9, 2006 (gmt 0)

LOL! Good point, and in keeping with the subject of this thread. :)

moTi




msg:1226922
 7:14 pm on Jan 9, 2006 (gmt 0)

Personally I see everything moving more toward the affiliate model. 100% pay-per-conversion.

You can fake clicks but you can't fake conversions

do you know where we came from? before adsense, online business was a one-sided advertiser market. it was about affiliate programs sucking out publishers with their pay per lead/sale method to squeeze out the last cent for their clients (=advertisers). for 90% of adsense publishers, there was simply no way to monetize a website to live on.

google et al revolutionize the market with their contextual cpc/cpm model. with them as middlemen, we have a win-win-win situation, for the first time giving the publisher negotiation power to DECLINE affiliate business proposals which don't generate adequate revenue for him.

so now you are thinking because of fraudulent actions (which are inevitable for every accounting method) we're going back to the old pay per sale model? why do you think a publisher should accept once again branding and promotion FOR FREE without being compensated? as said above: ain't gonna happen. i won't solely take the part of a sales department for someones products. i stick with selling ad space on my sites.

dgrati




msg:1226923
 7:36 pm on Jan 9, 2006 (gmt 0)

Google's goal is to increase earnings from advertising. It will do whatever it takes to keep the market growing. If there are enough fraudulent clicks, enough to turn us away, Google is not going to sit and do nothing.

Pay per conversion is an interesting rev-share model. There's a search engine that's already using this model. Check out Jan 06 issue of the Wired Magazine. I will post the link here later.

With pay per conversion, Google will obviously charge more. I think it's best for Google to lay it out as an option when the time is right. Google doesn't have to give an either/or choice between PPConversion and PPC. It can do both simultaneously.

Also, one size won't fit all.

Furthermore, a PPConversion would blend nicely with Google Wallet. Use Google Analytics in conjunction with Google Wallet and you are ready for Pay Per Conversion!

Obviously, Google is not going to do PPConversion right away. That's like admitting that there is fraud and Google wouldn't want to give that impression to a growing market. So Google would have to do this delicately at the right time. OR at least solve the problem delicately.

dgrati




msg:1226924
 7:45 pm on Jan 9, 2006 (gmt 0)

You know PPConversion is not such a crazy idea. Ebay is PPConversion.

With Google Wallet and Froogle, it's only inevitable that PPConversion will be visible.

dgrati




msg:1226925
 7:52 pm on Jan 9, 2006 (gmt 0)

Thinking about the post above, eventually Google itself will become a giant ebay!

europeforvisitors




msg:1226926
 2:32 am on Jan 12, 2006 (gmt 0)

Pay per conversion is an interesting rev-share model.

Not all advertisers are e-commerce or affiliate sites who expect immediate transactions. Service businesses, for example, are advertising for leads that can be developed into sales or business relationships at a later date. So, if the model called for pay per conversion, there would have to be agreement on what a "conversion" is.

If anything, I think it's more likely that Google, publishers, and advertisers will move to a CPM model (especially if Google wants to expand its roster of mainstream ad agencies and advertisers, not just the traditional PPC market of e-commerce and affiliate sites). Madison Avenue understands CPM, and impression fraud is probably easier to control than click fraud. (Also, CPM advertisers are used to having a certain amount of "waste circulation" from readers who don't see ads, radio "listeners" who leave their favorite FM station on for the dog during the day, or TV watchers who head for the bathroom when the commercials come on.)

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