Pay-Per-Click (PPC) advertising is the fastest-growing sector of all advertising, bringing in an estimated 6.1 billion to Google’s plate last year, accounting for approximately 99% of all revenue. At that pace PPC is on the breaking point of becoming the most significance vehicle for all advertising in the US, unless of course click fraud continues to plague the cost per click arena.

Click fraud has been reported by industry search giants to be anywhere from 5-20% and as much as 30% according to some independent online marketing research firms. The exact percentage of click fraud is unknown and in the end is simply too difficult to quantify, but one thing is certain, the percentage of fraudulent clicks is large enough to have caught the attention of Yahoo and Google, which both have dedicated antifraud teams continually fighting the problem.

So where does click fraud come from? Surely your competitors Pay Per Click add for Don’s Won-Tons is tempting to click every so often, but for a venue such as AdSense which monetarily incentivizes its traffic peddlers to push the envelope, its here you’ll likely find a much higher percentage of click fraud. As an advertiser opted into this network, the window to receiving fraudulent clicks is greatly increased. This is where Google says there may be a “variance” in the quality of traffic.

What once was the illicit manipulation of keyword based advertising by way of automated clicking programs or “click farms” where individuals are hired round the clock to click paid ads, has now evolved into methods of spewing regurgitated scraped content from existing websites back out onto the net. These types of techniques prove much more difficult to spot when ads are simply being served based off of what the AdSense-bot deems as relevant content. To the end user this may only present a couple of extra clicks to find what they’re looking for, but to the Pay Per Click advertiser this may have just cost a sale. For some this should throw up red flags, however other advertisers still find this advertising method as a way to garner additional market share despite any potential downgrade in quality. The antifraud team at Google is continually monitoring and putting in place measures for fraudulent click activities and in some cases providing credits to advertisers where foul play is discovered after the fact.

Regardless of the efforts put forth combating these fraudulent methods, click fraud will continue to cast a shadow upon the Pay-Per-Click advertising world. Ultimately PPC may evolve into yet another model of advertising such as Cost Per Action (CPA), where advertisers only pay when a click results in a specific action such as a sale or form signup. Even then the vulnerability to attacks by the net’s legion of BlackHats seeking to defraud the system is inevitable.

This entry was posted on Wednesday, November 8th, 2006 at 10:47 amand is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.