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How to Identify Click Fraud on Your Pay-Per-Click Ads

If you advertise your Web site on a search engine using pay-per-click (PPC) ads, you need to protect yourself from click fraud. If you’re a victim of click fraud, not only will it eat up your advertising budget, but it will also prevent potential customers from reaching your site.

Here’s a scenario you don't want to be in: You’ve set up a PPC campaign with several ads for your classic car customization Web site that show up in Google when people search for your PPC keywords. Since the ads are pay per click, you’ve set a daily budget of, say, $200, which means that Google keeps track of how many times people click your ads and stops displaying them when your maximum $200 daily spending limit has been reached.

Now your competitor, Devilish Devin’s Custom Auto, wants your ad campaign to fail and his ads to grab all the traffic. So Devilish Devin (who’s obviously unethical) hires some people to do nothing but search for your keywords over and over and click your ads each time they come up. None of these are converting customers, of course, but their clicks add up. Within a short time, your daily budget is reached, and now your ads won’t display for the rest of the day.

The search engines want to protect their advertisers from click fraud, so they examine clicks and credit back the invalid ones to the advertiser’s account. They have lots of filters to detect invalid activity — they look for patterns such as many clicks coming from the same IP address, repetitive or duplicate clicking, and the time of the clicks. Because they’ve been pretty successful monitoring and detecting click fraud, it’s far less of a problem today than it was even two or three years ago. However, the problem now is that even though the search engines will credit back the money into your account, you're still missing out on all of those people that would have seen your ad.

All of the major search engines give you reports and ways to track your PPC ads’ effectiveness. You tag your pages with code provided by the search engine, and track everyone who comes to your site through a PPC ad — from clicking the ad to landing on your site and all the way to exiting. This detail gives you a way to analyze clicks on your ads. You can watch for click fraud using these analytics, too.

Here are warning signs to look for that may indicate you’re the victim of click fraud:

  • Unusual peaks in impressions (number of times your ad shows on a search results page)

  • Unusual peaks in the number of clicks

  • No increase in the number of conversions during peaks in impressions or clicks

  • Drop in the number of page views (how many pages were visited per visitor) during peaks in impressions or clicks

  • Higher bounce rate (number of people clicking your ad and then quickly going back to the search results page) during peaks in impressions or clicks

When you detect a pattern that may indicate click fraud, you should report your findings to Google AdWords, Yahoo! Search Marketing, or to whichever search engine is running your PPC ads. It’s possible that they’ve already identified the same behavior and credited your account for those clicks. However, if they haven’t, they can analyze their data to determine if it is indeed fraud, and will usually credit your account if they find that it is.

It’s worth the extra effort to watch for unusual patterns in your PPC analytics. Even if you’re only getting a few more clicks than your average at a certain regular time of day, you might notice that you're not seeing any accompanying increase in conversions, which could be due to malicious intent. You might not think that there is any click fraud involved, but if each of those clicks costs more than $20, the cost can add up quickly. It can even deplete your daily ad campaign budget. A little diligence to protect yourself from click fraud pays off.

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