Joe Holcomb, Senior Vice President of Marketing, BlowSearch has a post that blows the lid off of click fraud. It's a long post, but it's a much needed wake-up call for the PPC industry. Here are a few of his key points:
- Competitor based click fraud is minuscule as compared to automated click fraud.
- Google is no better than anyone else is when it comes to detecting click fraud.
- Pay per click advertisers seem to feel that there is an “acceptable level” of click fraud. It’s looked at as a “cost of doing business".
- The bottom line is that the click fraud detection technology that exists today is pathetic and the fraudsters know it.
I've spent a lot of time analyzing several sets of log files from different companies, looking for click fraud. My observations lead me to believe that the overall points in Holcomb's post are accurate. The main problem is the current stance of the networks (i.e. Google, Yahoo) who are trying to make people believe they've got the click fraud issue under control. However, they aren't telling you what percentage of click fraud they think is acceptable. They are not open about what is really happening, and how much they can do about it.
This current stance by the networks - attempting to say the impact of click fraud isn't significant - only works because many advertisers are still making money. Advertisers accept the unknown impact because it's not preventing their campaigns from working. It's really not a top priority issue for most.
Click fraud may be analogous to spam. Back in 2001, spam was around but not a major issue. By 2003, IT teams were running around with their hair on fire trying to combat spam. Even though it was frustrating, email users worked through the problem, and now know how to live with it. Fortunately, the spam problem didn't have a group of email vendors trying to sweep it under the rug, the email firms didn't have a conflict of interest in combatting spam, and everyone agreed to fight it together. That's not really the case currently with click fraud.
However, while Holcomb is saying that the major search engines are dissembling and not doing enough, he does warn that some of the blame is on the advertiser side.
More than 70% of the time advertisers have no idea what their results are with their pay per click advertising. They are not tracking their ROI even though the tools are available to do it. That’s foolish on the advertiser’s part, and in my opinion, irresponsible sales and marketing by the PPC providers for letting it happen. Education is the key to success. Educate your advertiser and you have a happy advertiser.
This is dead-on correct. Even if Google really were focused on rooting out click fraud (Holcomb says they are not), that would not be enough. The advertisers have data that Google doesn't have. The advertiser can understand what happens after the initial ad click. Without that information, it's very difficult for Google to detect mildly sophisticated click fraud. Holcomb puts some burden on the advertisers to demand more accountability:
Advertisers are certainly not forcing PPC networks into disclosure with their wallets, so why should they disclose anything? If you are a PPC advertiser then you’re being complacent. It’s not the PPC’s fault. You haven’t stopped advertising long enough to force them into changing their ways. You haven’t made them accountable. I personally think that you should.
In other words: WAKE UP!
PS. I wouldn't take too much solace in Holcomb calling the competitive click fraud problem is miniscule, since I've seen it cost significant amounts of money. He's saying it's relative small compared to automated fraud. Competitor click fraud is slightly better understood and definitely easier to detect than automated bot click fraud.
¶ 4/12/2005
