Click Fraud & PPC: 4 Ways to Protect Your Bottom Line

September 27th, 2018 Posted by Click Fraud

Pay-per-click advertising is arguably one of the most important breakthroughs of the internet age. It has transformed the way we shop and do business, helped shape the digital economy, and created an entirely new industry of tech, experts, and consultants. It has leveled the playing field for millions of small businesses when it comes to advertising and promotion, and provided new opportunities for publishers and advertisers alike.

But with every internet success comes a price.

Whenever someone stands to benefit from a certain action online, there will be an inevitable wave of bots, automation, exploitation, and ways to fraudulently manipulate it.

Enter click fraud, the scourge of PPC budgets large and small.

In this article, we explore the whys of click fraud — identifying the bad actors and their incentive for poor behavior, and some pointers on what can be done to fight it, from online tools to campaign structure.

First, let’s explore what we mean by click fraud and why we should care.

Click fraud is the manipulation of ad clicks, typically for the purpose of inflating revenue for a publisher, driving up advertising costs for a competitor, or fooling advertisers into spending more money on a given ad platform. Click fraud is prevalent, if not rampant, in the world of pay-per-click advertising; a recent 2017 study showed that as many as 1 in 5 clicks are fraudulent, accounting for more than 20% of overall click volume. With PPC ad spend in the tens of billions of dollars each year (IAB estimated search ad spend totaled more than $40B in 2017), this is no small issue.

Fraudulent Publishers

A publisher is anyone who owns a website either in Google Display Network (GDN) or another network that allows advertising. Publishers are paid a percentage of what an advertiser is willing to pay for each click (the ad network takes the rest). The incentive here is clear; the publisher clicks on an ad and ad revenue goes straight into his or her pocket. More clicks, more revenue.

Often, this will go a level deeper, with publishers filling out forms on their own landing pages or taking another conversion-oriented action in order to falsely inflate their performance. When advertisers identify publishers who are converting, their first instinct is to pay them more.

Together, these are probably the most obvious and unsophisticated forms of click fraud. Google’s algorithms sniff this stuff out pretty consistently, using a combination of automated and manual tracking to uncover and penalize offenders.

Competitors

Competitors can have a small impact on click fraud, but not typically at the scale of other offenders. This tactic has two purposes: driving up costs for competitors and exhausting budgets early in the day. Since campaigns often have caps on their daily spend,

if their budgets are quickly depleted, it reduces the number of competitors entering the auction for a keyword. Fewer competitors mean a lower cost per click.

Ad Servers

In the ever-expanding world of digital advertising, there are many more options than Google, Bing, and Facebook. There are mobile-specific ad networks, video ad networks, ad networks set up to target specific interests or online actions, and many more. Often, ad networks will act as brokers for other ad networks, effectively masking their functionality and data sources, making it very difficult to verify click data. Sometimes, these networks are made up entirely of fraudulent clicks but are protected by the click volume or reputation of the publisher they sold to.

Unfortunately for advertisers, these networks are also very resilient. Even when they are discovered to be fraudulent, they simply move to another network. This game of cat and mouse allows fraudulent ad networks to continue to exist long after they have been exposed.

Don’t Be Evil (Just Don’t Trust Google)

Now, you might say that Google has a reputation to uphold and would not want to negatively impact its advertisers or discourage them from spending money in Google Ads in any way, and you would be right. Google Ads’ algorithms are perhaps the most sophisticated tools at your disposal when it comes to protecting against click fraud. They happen automatically, often before an advertiser is even charged, and are eliminated from the click total. Additionally, they have an entire team of actual people called the Ad Traffic Quality Team manually reviewing complaints and identifying abnormalities as an extra stopgap.

But that does not mean that they should be trusted altogether. Google’s incentive may be slightly less obvious, but one does not have to look too far to identify the conflict of interest that may be occurring here.

The various elements that create a conflict for Google are the same as those identified for any ad network — namely, Google gets paid for the clicks on your ads regardless of where they come from.

For Google, perhaps more than any other ad server, this is the most problematic issue; on the one hand, Google is not a “fly-by-night” ad server, and its reputation depends on you not paying for a ton of fraudulent clicks (thus the Ad Traffic Quality Team). On the other hand, Google is also dependent on those clicks to generate revenue for its shareholders, and it would be foolish to think that they weren’t at least trying to strike a delicate balance between instilling confidence in advertisers while also capturing as much ad revenue as possible. If they are too overzealous, they potentially miss out on millions of dollars in revenue. Not overzealous enough, and they risk tarnishing their reputation as a reliable advertising source. Not to mention the cost of chasing those highly sophisticated, highly incentivized fraudulent networks and bots around the internet all day long.

How to Fight It / How to Protect Yourself (Or Your Clients)

Fortunately, there are solutions. While ad networks and publishers have a responsibility to act in good faith, it is our responsibility as marketers to demand accurate data, measure and quantify our metrics, use software and tools at our disposal, and structure our accounts in a way that provides the clearest possible picture of our advertising efforts.

Tighten Up Your Settings

The first step in fighting click fraud is often built right into the settings of the ad account. Setting up IP exclusions and adjusting your ad targeting to be as specific as possible are great first steps. Additionally, when limited by budget, setting budgets to be shown evenly throughout the day will prevent most competitors from attempting to fraudulently drain your ad budgets.

Choose Your Publishers Manually

Instead of choosing publishers within Google Ads (for example) based on interests or topics, manually choosing the sites on which your ads are eligible to appear allows you to do your due diligence before paying for clicks. This takes more time, will cost more per click, and does not cast nearly as wide of a net, but it prevents fraudulent activity. It’s a balancing act.

Move to Social

Using a closed ad network such as Facebook and Twitter ensures that ad traffic stays within the “walled garden” of those networks. Competitors can still target your ads, but with the advanced targeting features available on these networks, it is less of a risk than with typical keyword-driven search ads.

Fight Automation with Automation

One of the more effective forms of protection against click fraud is the use of online tools dedicated to prevention. Companies like ClickCease and PPC Protect have built highly capable services that identify fraudulent behaviors, automatically exclude IPs, and submit refund requests to ad networks on your behalf.

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