improveyoursearchresults.com Blog

Advertisers bid on “keywords” that they believe their target market (people they think would be interested in their offer) would type in the search bar when they are looking for their type of product or service. For example, if an advertiser sells red widgets, he/she would bid on the keyword “red widgets”, hoping a user would type those words in the search bar, see their ad, click on it and buy. These ads are called “sponsored links” or “sponsored ads” and appear next to and sometimes above the natural or organic results on the page. The advertiser pays only when the user clicks on the ad.

While many companies exist in this space, Google AdWords and Yahoo! Search Marketing, which was formerly Overture, are the largest network operators as of 2007. In the spring of 2006, MSN started beta testing their own PPC service, MSN adCenter. Depending on the search engine, are up to $50.00 per click. Very popular search terms can cost much more on popular engines. Abuse of the pay per click model can result in click fraud.

Click fraud is a type of internet crime that occurs in pay per click online advertising when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad’s link. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud whether they like it or not.

Use of a computer to commit this type of Internet fraud is a felony in many jurisdictions, for example as covered by Penal code 502 in California. There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a competitor’s advertising budget.

A secondary source of click fraud is non-contracting parties, who are not part of any pay-per-click agreement. This type of fraud is even harder to police because perpetrators generally cannot be sued for breach of contract or charged criminally with fraud. Examples of non-contracting parties are:

• Competitors of advertisers: These parties may wish to harm a competitor who advertises in the same market by clicking on their ads. The perpetrators don’t profit directly, but force advertiser to pay for irrelevant clicks thus weakening or eliminating a source of competition.
• Competitors of publishers: These persons may wish to frame a publisher. It is made to look like the publisher is clicking on its own ads. The advertising network may then terminate the relationship. Many publishers rely exclusively on revenue from advertising and can be put out of business by such an attack.
• Other malicious intent: There’s an array of motives for wishing to cause harm to either an advertiser or a publisher, even by people who have nothing to gain financially. Motives include political and personal vendettas. These cases are often the hardest to deal with, since it is hard to track down the culprit, and if found, there is little legal action that can be taken against them.
• Unwanted “friends” of the publisher: Sometimes upon learning a publisher profits from ads being clicked, a supporter of the publisher (like a fan, family member, or personal friend), will click on the ads to “help”. However, this can backfire when the publisher (not the “friend”) is accused of click fraud.

In my estimates approximately 60% of all Google PPC clicks are fraud. Approximately 45% of all Yahoo PPC clicks are fraud using the same messurements. Going through either Google or Yahoo on you your own can be extremely costly if you don’t have the right technological know how to combat click fraud and be able to prove when it is click fraud to Google and Yahoo. Neither Google or Yahoo pro-actively remove any click fraud. They wait until you prove the them its click fraud to their standards of proof then back it out.

Here is an example of how costly click fraud can be. On Google to have the highest keyword you would pay $22.32 Per click according to the Google traffic estimator to have the #1 position. Lets say your average qualified PPC company charges you say a 25% premium. So you’re paying $27.90 per click. According to Google there are on average approximately 3,300 clicks per day so over a 30 day period would cost you $2,762,100 if you used the qualified PPC company.  Average conversion online is approximately 20% so since all the bad clicks are taken out you have an average cost per customer of $139.50 per customer when using a qualified PPC company that is proactively backing out the clicks. 

If you paid $2,209,680 for those same clicks including by doing it yourself then subtracted the 60% of click fraud out of the potential customers then had the same 20% conversion from your ligitimate online traffic you would pay $279 per customer.

In summary it would cost you $279 per paying customer to do it yourself vs. $139.50 to have a qualified PPC company manage your campaign that actively monitors click fraud and backs them out.

The interesting thing about this fact is that there is only 1 company I know of that offers this service directly to the business if you don’t have a multi-million dollar online ad budget. That is Yellowpages.com, the product is called YClicks. The only other companies I know that are getting this level of service are extremely large retailers with huge multi-million dollar ad budgets. Yellowpages.com has used the resources they use to pay for PPC and created a service to pass that technology down to even the smallest business.

If you want to try it yourself you can always go to Google.com or Yahoo.com and sign up yourself. I would recommend taking both their courses for PPC. The Google program will take about two weeks to go through if you read about 8 hours a day. The Yahoo program will take about 3 weeks to go through if you read 8 hours per day. And don’t forget they update their programs about once per month so you will need to stay on top of those changes.

If you have any questions you can reach me at myles@improveyoursearchresults.com

Since I provide this service for free at not cost to anyone it may take a day or two for me to get back to you as I have to work my day job to pay the bills.