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Study: Click fraud could threaten pay-per-click model
engine




msg:1225167
 2:33 pm on Jul 6, 2006 (gmt 0)

Online advertisers estimate that about 14.6 percent of the clicks on ads for which they're billed are fraudulent, costing them about $800 million last year, according to a study released Wednesday.

Study: Click fraud could threaten pay-per-click model [news.com.com]

 

Erku




msg:1225168
 2:51 pm on Jul 6, 2006 (gmt 0)

This is not a solution to the entire problem, but may be a remedy to the major part of it.

I think the Adsense, YPN and others should not accept any site that has traffic less than 1000 unique visitors per day.

Here is why.

When you only have 20 --- 50 visitors a day, each click is something for you. Each click matters, because it's a revenue and a major part of your site revenues. Chances are you may ask friends in other parts to click on them. Tens of thousands of webmasters do this daily, this translates millions of dollars of lost money.

However, if you have more than 1000 unique visitors per day and you get 50 or 200 clicks per day, you do not care for one more or two more 'extra' clicks, but rather guard the integrity of the program not to risk your participation in the program.

So I think that the entry barriers should be strengthend by Adsense and YPN.

europeforvisitors




msg:1225169
 2:59 pm on Jul 6, 2006 (gmt 0)

This study merely attaches numbers to a story that's been around for a long time. Even if the estimate is correct (that 14.6% of clicks are fraudulent) the actual figure is less important than whether the advertisers are getting a positive ROI.

Also, it would be interesting to know how the cost of click fraud compares to the cost of waste circulation in other media. All advertising media have a certain amount of slop built in (direct mail that ends up in the wastebasket, TV commercials that go unwatched, newspaper ads that don't get read, etc.), so click fraud--annoying as it might be in principle--could be no more of a problem in real-money terms than impressions in other media that are paid for but not actually delivered.

ryanfromaustin




msg:1225170
 3:37 pm on Jul 6, 2006 (gmt 0)

I think that in many instances, click fraud has become so prevelent that it's calculated in as a cost of doing business. If there were no click fraud, our business would be instantly more profitable, thereby enticing new competition into our industry, thereby increasing the demand and costs of PPC advertising, probably close to what we are paying now with the click fraud included. Our company is getting ready to launch a war on click fraud, but we can be certain that the Googles and the Yahoos of the world will get their money one way or another.

trillianjedi




msg:1225171
 3:41 pm on Jul 6, 2006 (gmt 0)

14.6 percent

I don't really see any problem with that? In fact I think it's pretty good. 85.4% genuine traffic. Impressive statistic really, I can certainly work within that.

TJ

Receptional




msg:1225172
 3:51 pm on Jul 6, 2006 (gmt 0)

Not yet as bad as the real world equivalent [muextension.missouri.edu] then. Apparently shoplifting causes a third of all bankrupcies. Spending your money on position 1 for {Select a big word of your choice} with broad match could do pretty much the same thing!

But it's another move towards a CPA model in the end.

Demaestro




msg:1225173
 5:11 pm on Jul 6, 2006 (gmt 0)

I want to echo europeforvisitors' point.

If I do a print ad campain in a newspaper I am paying for impressions only. I can't even tell how many people gave me a ROI in that ad campain, using coupons or having some thing like "mention you saw this ad for a deal" and then recording how many deals were given out gives you some idea, but really all you can do is look at the numbers the media you choose claims to have as far as readers or viewers goes. So many unknowns in a print campain.

But with PPC someone could see your ad 50 times and never click it but still take in some form of name recognition after the fact that could have them come to you. Especially in the case where they go to serveral websites on 1 topic and see your ad on every one of those sites. Your campain is much more transparent with this model, you have impression counts, click counts, you can set up tracking of people who land on your pages to see if they convert or not. All these tools would be so benficial in a print campain, but they are not available.

With the amount of merchendize that is stolen from store shelves each year and with the amount of other types of fraud committed against companies I think that this 16% is not all that bad and that if even 10%-25% of the 84% of real clicks convert then I would call the campain a success and like any other theft I can accept that some fraud will happen in during this campaign but that in the long run running the campaign with risk of some fraud is better then not running the campaign at all and loosing alll the real business you would have had, had you ran the PPC campaign.

ryanfromaustin




msg:1225174
 5:14 pm on Jul 6, 2006 (gmt 0)

Receptional:

There are problems with the CPA model as well. It's difficult for us to measure the exact impact of click fraud, but 15% sounds like a pretty reasonable estimate. On the other hand, our affiliate program generates about 50% bogus leads. Of course, this would not be an issue for retailers marketing a product for sale, but for those of us in the lead business, CPA brings on a whole new list of challenges and the scammers always seem to be one step ahead.

oldpro




msg:1225175
 6:57 pm on Jul 6, 2006 (gmt 0)

the actual figure is less important than whether the advertisers are getting a positive ROI.

If this 14% to 15% figure is true...I am saving about $200 per day by not participating in the adwords content option.

So yes...this actual figure is important to me...as an advertiser I am getting a MORE positive ROI than I would otherwise.

True other mediums of advertising such as direct mail end up in the wastebasket, but the CPC model has a great deal of control for the advertiser to eliminate unproductive strategies and tactics.

When we did participate in the content option...the clicks from adsense produced zero conversions to sales. I would say that is definitely a negative ROI.

ember




msg:1225176
 7:03 pm on Jul 6, 2006 (gmt 0)

14% is the cost of doing business. If it stays at that rate, I don't see it as a major problem. And only accepting sites that have 1,000 visitors or more a day is discriminatory and will not solve the problem.

BillyS




msg:1225177
 8:09 pm on Jul 6, 2006 (gmt 0)

Advertisers know this. The 14% is automatically taken into the ROI calculations due to its affect on the conversion rates.

What the 14% does is hurt us legitimate publishers because we could be getting paid more for sending the higher quality traffic.

europeforvisitors




msg:1225178
 9:11 pm on Jul 6, 2006 (gmt 0)

When we did participate in the content option...the clicks from adsense produced zero conversions to sales.

Several travel advertisers have told me personally that they've had very good results with AdSense, and some of the "Ads by Gooooogle" advertisers on my own pages have been using AdSense almost since the beginning. So maybe success depends on the topic, the keywords, and judicious use of the domain-blocking feature.

I do think that lack of advertiser control over audience is the biggest weaknesses of current PPC networks, and it's almost certainly limiting the networks' popularity among advertisers and media buyers who are used to having that control. Google currently offers "site-targeted CPM" ads on a run-of-site basis. If and when it (or a major competitor) offers site-targeted contextual CPC ads, new opportunities will open up for the ad network, advertisers, and publishers.

gregbo




msg:1225179
 10:48 pm on Jul 6, 2006 (gmt 0)

I think the Adsense, YPN and others should not accept any site that has traffic less than 1000 unique visitors per day.

How do we decide what is a unique visitor? There isn't a consensus on this yet.

When you only have 20 --- 50 visitors a day, each click is something for you. Each click matters, because it's a revenue and a major part of your site revenues. Chances are you may ask friends in other parts to click on them. Tens of thousands of webmasters do this daily, this translates millions of dollars of lost money.

Are we so sure that sites with more than 1000 unique visitors (whatever that might be) don't engage in such practices?

So I think that the entry barriers should be strengthend by Adsense and YPN.

I agree that entry barriers should be strengthened, but I'm not convinced that setting an arbitrary visitor count is a good way to do it.

Given the amount of publishers who claim that they didn't understand they were breaking the AdSense TOS when they were dropped from the program, perhaps at the very least G should give tests, such as you get when you apply for other licenses. The other engines and ad networks could do likewise. At the very least, those people who are breaking the TOS could not claim that they'd never been told what type of behavior was expected of them.

bumpski




msg:1225180
 11:32 pm on Jul 6, 2006 (gmt 0)

Much of the automated fraud has nothing to do with the original publishers. There are the admitted tipsters, so Erku perhaps even the "large" traffic sites are being "tipped".

There are many out there who have published their intent to commit click fraud because Google is not willing to pay ransom. Basically extortion.

Of course then there is the competition! Trying to harm competitors by clicking on their ads. The assumption that click fraud is originated by the publisher is silly. This absolutely must be the easiest form of click fraud to detect, deter, and even prosecute.

It is the large sites where click fraud is statistically difficult to detect; so actually what should be done, based upon erku's assumptions, is to disallow all large sites from Adsense! This solves the MFA problem too! It's too costly to purchase hundreds of thousands of domains, so MFA's would go out of business!

Large sites also have the corporate driven incentive to make money for the share holders, what a diverse set of clickers!

So given these observations, ban sites with more than 1000 uniques per day from Adsense to eliminate most of the click fraud! The remainder will be easily detected!

A facetious post!

incrediBILL




msg:1225181
 11:37 pm on Jul 6, 2006 (gmt 0)

So I think that the entry barriers should be strengthend by Adsense and YPN.

Talk about elitist nonsense!

Saying that only high traffic sites are trustworthy is not only naive, they may be cheating as well, it's downright offensive to small site owners.

My wife has a squeaky clean little site with a small amount of traffic but she gets great coversion rates with affiliates and her amount of AdSense money is statistically very high compared to my high traffic site.

You can't judge a site by it's traffic.

gregbo




msg:1225182
 11:49 pm on Jul 6, 2006 (gmt 0)

Also, it would be interesting to know how the cost of click fraud compares to the cost of waste circulation in other media. All advertising media have a certain amount of slop built in (direct mail that ends up in the wastebasket, TV commercials that go unwatched, newspaper ads that don't get read, etc.), so click fraud--annoying as it might be in principle--could be no more of a problem in real-money terms than impressions in other media that are paid for but not actually delivered.

But there is slop in online media -- ads that are clicked on but no conversions are made due to lack of interest; banners, videos, etc. that are ignored. Click fraud is an additional charge to the advertisers on top of slop.

ronburk




msg:1225183
 12:18 am on Jul 7, 2006 (gmt 0)

85.4% genuine traffic. Impressive statistic really, I can certainly work within that.

You're assuming the fraud is evenly distributed, which it is not. Instead of 15% fraud, try working with 0% fraud for a month, followed by a week of 80% fraud. Is that a fraud attack you see in your stats today, or did your product get mentioned in some as-yet-undiscovered hot forum? As with network attacks, click-fraud attacks can be hard to distinguish from sudden, non-fraudulent, spikes of success.

I used to assume Google was probably pretty savvy about most forms of click fraud. But then I watched a fraudster bill me for 100% click-thru rates for hours at a time. Now that was 100% CTR (normal CTR was a fraction of a percent for that term), via Google Search (not the content network). So Google had all the data they needed to quickly and automatically detect the fraud.

They didn't do a thing (except bill me). I monitored this situation over the course of several days. Would Google have "eventually" noticed the fraud and refunded my money? I can't prove they wouldn't have. All I know is, they blithely billed me right up until I filed a fraud report (in the section where they ask for your log data, I basically said "Ummm, you've got all the log data on your side, unless you think a 100% CTR for hours at a time is normal"). Then I got my refund and the fraud stopped.

Personally, I'm less interested in the question of precisely what overall percentage of click fraud there is than I am in questions like:

  • Does Google have any automated systems in place to detect fraud, or are they just blowing smoke?
  • Does Google ever intercept and stop fraud on their own, or do they always wait to see if someone will file a click fraud report?

In any case, I no longer think it's a good idea to make serious use of either AdSense or AdWords without having in place some provisions to try to automatically detect fraud. Without some new evidence to the contrary, I don't think it makes sense to assume Google will help you with this.

Draconian




msg:1225184
 12:48 am on Jul 7, 2006 (gmt 0)

You know, you're more likely to get 100% conversions with 10,000,000 customers than win the lottery?

Jaunty Edward




msg:1225185
 10:05 am on Jul 7, 2006 (gmt 0)

Hi,

It will be wrong to put a limit on entry based on number of visitors or impressions.

One of the major reason why adsense became so popular is the fact that anyone with a small website can make money. And that matters to google as its money for them as well. I still remember my first day with adsense 3 years back... 5 page immpressions on the first day....lol... today its well above 3000 a day.

I am sure the google algorithm is smartly analysing the trend of clicks with websites that have lower number of impressions, they surely understand, that there is some level of click fraud(most probably). I have noticed when I get 3000 impressions in a day I get lower earnings while when I get 12,000-18,000+ earnings are huge.

Bye

RhinoFish




msg:1225186
 3:27 pm on Jul 7, 2006 (gmt 0)

Eliminating lower traffic sites will do one thing... reveal, once those sites are gone, that fraud percentages are higher elsewhere (and that canning the little guys was a mistake).

Analyze your data... fraud doesn't disproportionately come from low traffic sites, quite the opposite is true. Nope, it's not the big legit guys with the most fraudulent clicks either, but people doing fraud cashing for a living aren't mom and pops (and they aren't the NYTimes either). However, they're much better organized, and have higher traffic flows than the <1,000 visitor sites some people are taking aim at...

incrediBILL




msg:1225187
 7:16 pm on Jul 7, 2006 (gmt 0)

fraud doesn't disproportionately come from low traffic sites, quite the opposite is true

I concur as the low traffic sites with maybe a few hundred visitors a day should be easier to spot fraud as they would statistically skew the norm and set off a flag to be scrutinized carefully.

It would most certainly be easier to slip in some click fraud on a site with 10,000+ visitors a day as long as you didn't get greedy, to bolster your bottom line as reviewing 1,000 IPs/day that clicked, assuming a 10% click rate, would be a daunting task opposed to 100 clicks or less on a low volume site.

I don't think the issue is one idiot sitting at his desk clicking away as that's too easy to track as the same IP clicking over and over and over would/should set off an alarm.

How would the clicker get around this?

Open proxy server to the rescue.

Google could, assuming they aren't already, block proxies like I do on my website. This would block clicks from open proxy servers or CGI proxies and/or just discard those clicks if you didn't want to expose you were blocking them. Those proxy servers are what your competitors might use to keep hidden, a malicious clicker trying to boot you from AdSense, or a clickbot running from a desktop or server could use to remain anonymous, and there are a LOT of open proxies out there.

Imagine someone had a script (and they probably do) just to issue a random click per IP over maybe 100 different proxy servers a day, and your topic had an average of $1/click. That could add up to some serious coin by the end of the month. Therefore, dropping proxies from the loop closes one potential hole but still leaves click rings and trojan click bots, but you have to start somewhere.

oldpro




msg:1225188
 7:37 pm on Jul 7, 2006 (gmt 0)

Google currently offers "site-targeted CPM" ads on a run-of-site basis. If and when it (or a major competitor) offers site-targeted contextual CPC ads, new opportunities will open up for the ad network, advertisers, and publishers.

Totally agree...

Google's site targeted contextual advert. is still too much of a "shotgun" approach. If it could be refined to more of a "rifled" approach, the value to advertisers would be tremendous.

europeforvisitors




msg:3000457
 9:42 pm on Jul 9, 2006 (gmt 0)

Google's site targeted contextual advert. is still too much of a "shotgun" approach. If it could be refined to more of a "rifled" approach, the value to advertisers would be tremendous.

Google doesn't yet have site-targeted contextual ads. It has site-targeted "run of site" CPM ads, which obviously work well for some advertisers but not for others.

On my European travel site, for example, a worldwide hotel-booking service or an airline might be interested in buying site-targeted "run of site" ads (indeed, some have done so), but a vendor of Elbonian kayak cruises or a tour operator in Widgetonia is likely to want contextual (page-targeted) ads.

asas111




msg:3000656
 2:48 am on Jul 10, 2006 (gmt 0)

As long as stupid DHCP exists, we will always have these problems.

If every computer had one unique IP, with no stupid proxies and DHCP, the problem would be much less severe.

I think we should all contribute and try to come up with solutions, maybe Google will take them and apply them.,

apprentice




msg:3001380
 4:23 pm on Jul 10, 2006 (gmt 0)

I think the Adsense, YPN and others should not accept any site that has traffic less than 1000 unique visitors per day.

That sounds a bit too harsh as not everyone gets to that figure. As you mention there are many abusers out there with low traffic websites asking friends, parents, neighbours and even pets to have a click every so often. In that way, they might earn an extra undeserved $$ per day, which they use to treat themselves a meal once a week. At the same time they are wasting other people's money which is very wrong, but also damage the reputation of Adsense and YPN as reliable means of advertising - which is what this thread is all about.

On the other hand, you have a few 1000s of webmasters that they do not abuse PPC to their advantage and try to put on an honest web presence. For non-abusive starters like them, PPC will usually cover the domain name and hosting costs so they can keep going. According to the 1000-visitor-per-day principle, they wouldn't stand a chance as in most cases it takes a long time for a new website to reach the 1000 visitor per day figure (and some of them never will). What about them?

Regards.

gregbo




msg:3001934
 12:22 am on Jul 11, 2006 (gmt 0)

As long as stupid DHCP exists, we will always have these problems.

If every computer had one unique IP, with no stupid proxies and DHCP, the problem would be much less severe.

I think we should all contribute and try to come up with solutions, maybe Google will take them and apply them.,

You should probably read the discussions on IETF and NANOG regarding IP address allocation. It's unclear that even with more addresses available through IPv6 that proxies and/or DHCP will go away.

moTi




msg:3016704
 1:32 am on Jul 21, 2006 (gmt 0)

But there is slop in online media -- ads that are clicked on but no conversions are made due to lack of interest; banners, videos, etc. that are ignored.

sorry, but my contribution to your business success ends at the click. i'm not responsible for actions occuring when a potential buyer enters your web page. as well i am not responsible for crappy ad copy, crappy landing pages, crappy payment methods, crappy products. i deliver qualified traffic to the best of my ability, that's all i will do for you. you want me to be your salesman? no way, i'm an independent publisher and i like my job. expand your sales department otherwise, i don't want to sell your stuff ;)

gregbo




msg:3017782
 8:25 pm on Jul 21, 2006 (gmt 0)

But there is slop in online media -- ads that are clicked on but no conversions are made due to lack of interest; banners, videos, etc. that are ignored.

sorry, but my contribution to your business success ends at the click. i'm not responsible for actions occuring when a potential buyer enters your web page. as well i am not responsible for crappy ad copy, crappy landing pages, crappy payment methods, crappy products. i deliver qualified traffic to the best of my ability, that's all i will do for you. you want me to be your salesman? no way, i'm an independent publisher and i like my job. expand your sales department otherwise, i don't want to sell your stuff ;)

It will help when you quote me to include enough context so people will know what I am referring to. The argument is often made that click fraud is somehow a "tax", or "cost of doing business", or some wastage such as people not paying attention to ads. This is not only fallacious, but dangerous, because it obscures the fact that click fraud is a crime -- it is premeditated depletion of an advertiser's budget.

moTi




msg:3017957
 11:31 pm on Jul 21, 2006 (gmt 0)

click fraud is a crime

first time that i'm completely with you. it's a crime and it should be prosecuted by all imaginable means.
this cancer not only sucks off advertiser spendings but also throws an unfavorable light on the majority of hard-working honest content network publishers and reduces their earnings as well (whereas fraud apparently is also committed by rivalling advertisers on search and content).
however, as fraud rate stays manageable and roi is fine, most of us can live with it very well. no need to panic or cry for ppa.

[edited by: moTi at 11:39 pm (utc) on July 21, 2006]

gregbo




msg:3018891
 1:14 am on Jul 23, 2006 (gmt 0)

Remember that it was Google who announced CPA testing. Obviously, they feel there is a need to provide it. Couldn't be perhaps that "most of" the advertisers that Google does business with thought CPA was a good idea, hmmm?

This 32 message thread spans 2 pages: 32 ( [1] 2 > >
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