There's no doubt that Pay per click (PPC) advertising can be a very profitable and cost-effective way to drive targeted visitors to your site. If you're new to the world of PPC advertising, you may want to read my introductory article on pay-per-click first.
Aside from the ongoing problems of pay per click, such as getting into bidding wars, there is a much more sinister challenge to overcome - fraud.
It's quite amazing the lengths that some publishers will go to to commit fraud; and I'm not talking about the webmaster who clicks on your ad once a day to clock up his revenues, or the competitor who occasionally clicks on your ad out of spite. What I'm referring to is those parties who create complex robots to generate thousands of clicks, while spoofing IP addresses in order to fleece their advertisers and avoid detection. Then there's the competitors who do similar things - not to build revenue for themselves, but to drive other advertisers out of PPC listings and at times, out of business.
Click fraud also drives up the cost of each click as some PPC companies adjust the minimum price of each click based on the popularity of the category or keyword.
Some estimates state that up to 50% of PPC traffic is illegitimate. While that figure is way too high in my opinion, I'm sure that it does happen to some, perhaps at even higher percentages; especially on some 2nd tier engines.
As PPC engines and technology has evolved, so too have the inbuilt anti-fraud mechanisms that PPC companies utilize. The major companies treat pay per click fraud *very* seriously. But the situation is a little similar to the battle against viruses - as a "cure" for a virus is released, a new virus appears. It's for this reason that ecommerce site owners employing PPC marketing strategies must also have an anti-fraud strategy, particularly in competitive industries.
PPC anti-click fraud tips
Fraud can be very easy to detect in some instances, only requiring you to choose the pay per click company wisely and then monitoring results on a daily basis. The more expert fraudsters may require you to use special tools to monitor activity for you.
Avoid PPC networks that allow incentive sites
Before signing up with a PPC company, always ask the question - "do you allow incentivized sites to participate in your network?" An incentives site will offer something to its visitors in order that they get something for free or be entered into a competition. That being the case, the clicks that you'll receive will more than likely be rubbish. Incentivized sites aren't fraudulent sites as such, but it's important to make the clarification.
Frequency caps on clicks
Ask the PPC company if they use frequency caps and what the cap is. A frequency cap or filter is a set of rules that will prevent duplicate clicks originating from the same IP from being deducted from your balance.
Limit daily click spends
This is very important. Not many of us have unlimited budgets and I've heard all too often of ecommerce site owners depositing thousands of dollars into a PPC account only to find it totally depleted within a very short period of time. Like gambling, only invest each day what you can afford to lose, then bump it up slowly and monitor it every day. For example, if you set a limit of $100 a day and for the first week you are averaging $90 worth of clicks for the entire day, and then the next day you burn through the $100 before 8am, without an increase in sales or leads, this should set off alarm bells. At least in this scenario, you would have only lost $100 instead of your entire remaining deposit.
Think about your target market - do you really need coverage in North Africa for example? Bear in mind that a great deal of all sorts of fraud has it's roots in Eastern European, African and some Asian countries.
Study your server logs
Download your server logs each day and study them for multiple clicks originating from the same IP. If you haven't worked with server logs before, you may like to review my tutorial on interpreting web site traffic or you may wish to use specialized tools instead to save time.
Use specialized click fraud tools
There's a number of easy to use third party analytical tools available on the market now, and unlike their predecessors in years gone by, they are becoming increasingly affordable and refined. Click tracking software can also be very useful in spotting fraud.
Most good companies, if you can prove fraud, will happily refund your deposit and the information also helps them identify fraudsters and refine their own click fraud filters and traps.
Whatever method of click fraud prevention and detection you think best for you, ensure you implement something soon - you may be surprised at how much money you may be losing each day.
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