Featured Article – Pay-Per-Click Fraud
Trent Blizzard, CEO, Blizzard Internet Marketing
There have been some prominent articles in the press recently about pay-per-click Fraud:
These articles report different percentages on the amount of fraud in PPC marketing. Apparently, it accounts for about 10% of click throughs, but goes above 50% for some industries. The higher the bid prices on a given click, the more likely the click is fraudulent. Because Business-to-Business advertisements tend to be the most expensive (up to $100 per click), they receive the most fraud.
You may be asking why there is fraud in the first place. There are two typical scenarios behind any fraud:
1. Competitive Fraud: Your competitors click on your advertisements just to make you use up you budget.
2. Affiliate Fraud: Websites (called affiliates) insert Overture (or Google) PPC ads into their site in order to make some extra revenue. An unethical affiliate will click on their own links. Because affiliates make a percentage of any traffic they generate through a PPC ad, they theoretically can make more money by clicking on ads within their own websites.
Our account managers keep an eye on potential fraud for our clients, and we remain generally unalarmed by the current levels of Fraud. Most of our clients have bid prices under $1, which is usually not worth the fraudster’s time (why click on a $1 ad when you can click on a $10 ad and make a lot more?)
We also utilize software that helps us see a pattern of fraudulent clicks when one exits. We can look at the following types of data to determine fraudulent patterns:
Bounce rate by referrer: Using this metric we compare the bounce rates (the % of visitors who enter the website and then leave right away, without looking at interior pages) of PPC advertising versus other forms of advertising (free search engine traffic, chamber of commerce traffic, lodging directories, etc).
Bounce rate by PPC phrase: Using this metric, we compare the bounce rates of different phrases from a PPC campaign. We want to keep our eye out for a high per-click PPC phrase that also has a high bounce rate.
Conversion rates by PPC referrer: We use this report to determine the percentage of visitors from a given campaign who are indicative of conversions… and very qualified traffic. For instance, we could tell a client the percentage of visitors from Overture who visit a rooms, look at specials, enter the booking engine, and actually book. It is easy to see if visitors are fraudulent by comparing these percentages with traffic from other resources.
Conversion Rates by PPC phrase: This tracks the conversion rates by specific phrases, just in case fraudulent traffic is coming in on one specific phrase.
ROI by PPC campaign and ROI by PPC keyword phrase: We can actually track every reservation from your booking engine and tell you the dollar amount of reservations created by each specific campaign (PPC, lodging directory, paid ad, etc). It is easy to say fraud is not an issue when you are booking room nights from Overture visitors!
We can do a click-fraud analysis for any customer or non-customer who is interested. Frankly, if you are spending hundreds of dollars per month in PPC traffic, you probably cannot afford to NOT have that kind of data at your fingertips.