An unfortunate byproduct of the pay-per-click advertising business is click fraud. A lot of people with an online business spend considerable amounts of money on pay-per-click advertising just todiscover that lots of the people clicking on their ads were not really interested in their services or products.
Bogus”visitors” to a pay-per-click ad represent click fraud. This is a serious scam that threatens the viability of this payper click advertising business that has been enormouslyprofitable for each the main search engine operators, namelyGoogle, Yahoo/Overture, and MSN.
Click fraud has different twists, but the final result is generallythe same. Advertisers are billed for fruitless traffic generated by someone who repeatedly clicks on an advertiser’s ad with no intention of buying anything.
The search engine advertising market is currently about $3.8 billion per year and estimates vary widely on how much click fraud is, in fact, going on. Certainly, the search engine operatorswould prefer to downplay the magnitude of this issue. Some industryexperts claim that a little click fraud exists but that it isoverblown by advertiser paranoia, while others estimate that tento twenty percent of all clicks are false (made by someone withno valid interest in the ad itself).
Virtually everyone involved with pay per click advertising sees click fraud and knows it is there, but nobody is quite certain what to do about it.
Both Google and Yahoo/Overture acknowledge that the click fraud problem exists, but claim improved internal controls will preventthe issue from escalating. Their stated position appears to be that they’re worried about click fraud, but it is not a material issue up to now. Both of them are touting their increasinginternal activities aimed at detecting and combating click fraud.
Such reassurances from search engine companies certainly are not surprising, given how much they stand to lose if advertisers cut back on advertising spending. The stakes are enormous and thesearch engine companies are actively engaged in people relationscampaigns.
Marketing on search engines has become a fast-spreading trend as an increasing number of marketers have realized substantially higher returns on search engine ads than on more traditional marketing campaigns conducted through print media.
Most pay per click advertisers set a spending limit and once the spending limit is reached, the ads cease to appear at the searchresults. Click fraud is a really unethical competitive tacticwhere someone clicks on a competitor’s ad until the spending limit is reached and the ad then disappears from thesearch outcomes. It appears that it is merely a matter of time before some advertisers become so exasperated with click fraud that they file a class-action lawsuit against a significant search engine.
If you use pay-per-click advertising it would be smart to carefully monitor your traffic to find out whether you’re the victimof fraud. In any case, it is probably safe to state thatpay per click advertisers will have to take a certain level of click fraud as just a cost of doing business.