Click Fraud 101
Written by: Timothy Martin

At Nuanced Media, we manage a lot of successful pay-per-click campaigns on behalf of clients. One of the reasons so many of those campaigns have been successful is that we constantly monitor them in order to put our clients’ advertising dollars where they’ll do the best.

One of the benefits of monitoring campaigns instead of setting them up and letting them run until the money well dries up is that we cut down on click fraud as well.

Um, hello? I have some questions.

Oh, it’s Mr. Helpful Rhetorical Device. I’m glad you showed up to make this easier.

Ask away.

 

What is Click Fraud?

Click fraud has been around since pay-per-click advertising was invented and occurs when someone – often a person, but sometimes an automated script or computer program – clicks on paid ads in order to generate a charge on either end of the transaction.

 

Wait, what’s that last part again?

That last part is super important as it relates to click fraud.

We focus on building pay-per-click marketing campaigns, built on top of the Google AdWords platform, as well as other similar avenues such as Bing, YouTube, and others. The super simplified explanation is that in those campaigns, the advertising platform serves up our clients’ ads to prospective customers, and in exchange, our client pays an amount of money every time the ad is clicked.

Additionally, many advertising platforms, including AdWords, offer website owners the ability to host those ads on their site. Those website owners earn a small amount of money every time those ads are clicked.

Unscrupulous website owners sometimes participate in click fraud in order to earn more money on the ads they host on their site, which in turn costs the honest companies who placed the ads more money.

 

So it’s a scam for website owners to make more money?

Not exclusively.

Sometimes, those clicks are aimed at draining a competitor’s resources, rather than inflating a website’s commission check. When a company finds itself falling further and further behind the competition – or more likely, neck and neck with them – they may resort to click fraud in order to push the cost of their competitor’s PPC campaign beyond their budget, or to expand that budget early in the month so that their ads won’t display for most of the month.

 

That….sounds potentially illegal.

It is. Click fraud is the subject of an increasing amount of litigation, especially considering the placement of advertising networks as materially benefiting from both types of fraud.

In fact, in 2006, Google agreed to a $90 million settlement in a class-action suit, a year after Yahoo settled a similar suit.

 

So why would anybody start a PPC campaign?

Pay-per-click marketing is a cost-effective way to put your business in front of thousands of customers. Well-managed campaigns pair incredible reach with granular control over who ads are displayed to.

Click fraud doesn’t negate those virtues. It just means that you need to take some extra steps in managing your campaign.

 

What do you mean?

While most advertising networks have strong, automated click fraud detection methods, click fraud still happens and can be difficult to detect at a glance. Third-party auditing software can help detect fraudulent clicks, as can thorough examinations of the source and behavior of click traffic. Both avenues help make disputing fraudulent click traffic easier.

The best way to protect yourself, and your campaign budget, is to take proactive measures in setting up your campaign. This is the value of working with an expert digital marketing agency like Nuanced Media.

 

What does Nuanced Media do to prevent click fraud?

That’s an excellent question, Mr. Helpful Rhetorical Device. I’m glad you asked it.

We prevent click fraud by using negative keywords to limit the scope of the searches that will display our clients’ ads. By doing this, we can eliminate the most common keywords associated with click fraud right off the bat, and focus the search traffic toward likely customers.

We also tend to target local traffic in order to further focus search traffic toward likely customers. This also helps avoid our ads displaying in countries with low labor rates, where some spammers employ people for the sole purpose of clicking on ads.

Most importantly, we monitor everything. Those first few methods are good for eliminating click fraud that aims to increase a commission check, but constant monitoring is needed to eliminate competitors attempting to drain client resources. That’s why we monitor campaigns for suspicious click traffic, as well as the campaigns of competitors.

There is also an IP exclusion tool in Google AdWords that allow us to block both specific IP addresses, or entire ranges of IP addresses, from seeing ads.

 

I feel a lot better. Thanks!

No, thank you, Mr. Helpful Rhetorical Device. Thank you.

 

If I want to learn more about pay-per-click marketing, what should I do?

You should get in touch with our marketing team if you have any questions.

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