January 06, 2006 | Friday

Click fraud: Get vigilant and get real

By Richard Gregory - COO  in Search Engines |Search Expertise |Click Fraud

The latest issue of Wired magazine features a fairly alarmist article entitled How Click Fraud Could Swallow the Internet. That makes for an attention-getting title, but let’s look at what it actually says.

Cauff was infuriated when he discovered that up to “40 percent, maybe more” of the clicks on his keyword ads apparently came not from potential customers around the nation but from a single Internet address, one that belonged to a rival based in New York City.

First thing, always watch out for the use of the words “up to” whenever figures are quoted. We all know that “up to 40 percent” also includes much smaller numbers, like 10 percent and 2 percent.

Secondly, a claim of 40 percent click fraud seems high across an entire campaign. But 40 percent click fraud on individual keywords in specific sectors may not be unusual.

Click fraud simply waters down the relevant traffic. Businesses should be focused on the cost per booking/acquisition/sale. In a true market, the value of a click is related to the quality of the traffic. So without click fraud, the individual cost-per-click (CPC) may rise, but the end cost-per-sale will remain the same. For example, if a keyword has a CPC of £5 and converts at 5% with 50% of clicks being fraudulent, the removal of the fraud will improve the conversion to 10%, but the CPC may also rise to £10. (Click fraud on Google actually improves your click-through rate and can lower your CPC and/or increase your position.)

Of course, click fraud is an issue. That’s why Latitude is the only search engine marketing company in the UK with a full-time Loss Prevention Officer, whose sole responsibility is to monitor - with the fraud detection tools of Latitude’s own campaign management software, COBRA - all of our clients’ campaigns for click fraud. It is crucial that agencies, advertisers and search engines work together to get a full picture of the user journey from search through to sale. But it’s also important to be precise about the extent of the problem, and not buy into dubious claims and alarmist journalism. 

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