Why all the worry over click-fraud?

[Monolith]

I dont really see how click-fraud is such a danger to the PPC industry.

Lets use the ppc keyword "dogfood" as an example. There are 100 legitimate content sites that have contextual ads displayed for "dogfood." The industry is 100% "pure" at this point - any 'dogfood' ads clicked on will result in legitimate leads for the advertiser. Because of this, the value of each click rises to $5. The advertisers product may only sell for $5.01, but because each click is legitimate, theyre still making money.

Now, lets move a year into the future. The "dogfood" niche now has 200 websites, but only 150 of them are true content sites - there are now 50 spammy portals, which either generate relatively useless traffic/clicks, or just blatantly try to defraud the system with clickbots. This means that only 75% of the clicks generated by the dogfood ad publishers results in a legitimate lead for the advertiser. So, each click is only worth 75% of what they were paying a year ago - $3.75. Since the amount advertisers pay is completely up to them, the high bid for the industry drops to the highest sustainable amount of $3.75 (since paying any higher would result - long term - in a loss).

As time goes on and more spammers dilute the traffic, the price per click simply drops to match. For the advertiser, it makes no difference - the bidding system ensures that they never pay more. As the bid price drops, their marketing budget stays the same - so theyll simply be generating more untargeted traffic to their sites instead of less targeted traffic. Either way, theyre still getting the same number of sales.

Of course, assuming there were no intervention, this could eventually reach a point where the traffic is 100% noncontextual/fraudulent... but even then, the bid-per-click style works in their favor, since if 1 out of every 1000 untargeted visitors results in a sale, that traffic still has value - albeit at a very low cost per click.

But even with all that, Google (and im sure others will follow) has found a way to keep your traffic contextual no matter what - by allowing advertisers to target certain websites to the exclusion of others. This makes spam and clickbot sites completely irrelevant.

So, whats all the concern about? It seems like the only thing spam and clickbot sites are hurting is themselves.

 

[luxinterior]

Very eloquent indeed but your statistics are basically flawed because you are painting a scenario that spans years when the reality is the majority of advertisers are small time, one shot, joe blows who may only be in it for a few weeks. So fraudlent clicks will utlimately mean the small advertiser loses his investment, period. I'm really at a loss to see how you fail to grasp the most simplest of concepts. If I bid $1 per click and you send me 100 fraudulent clicks your happy because you get my $100 (until Google ban you) but ultimately I'm pissed. The net effect of all this is that the majority of advertisers loose faith in the adsense model and spend their advertising revenue elsewhere which ultimately hurts 99% of Webmasters (the ones that don't play stupid games).

I await your equally eloquent rebuttal.

Lux

 

[JMJ]

There will always be a need for PPC. Companies prefer PPC over SEO because PPC guarantees them high positioning, SEO is a gamble. No matter how much you put on the table gambling on SEO you will never beat the paid positioning. PPA won't work in this senario because many different type of companies selling different products with different commisions will want the same keyword. One cant have higher positioning over the other because of this.

Now a provider could charge $x amount for the position and then pay x amount for the sale but it will still turn into a bidding for position process. Which is why I prefer to call PPC > PFP pay-for-positioning.

Let's use billboards as an example. My grandmother has some property along the interstate here in town. She has 4 billboards which face both ways going in and out of town. The two facing those who enter town get more money than those that face going out and both are attached to each other. Why is this? Well for one they are just after the airport heading into town. They are the first things new comers see as they enter my town. The companies may or may not get more or any business from this but they get exposure.

It's not her job to sell anything from these billboards or make sure their sales are increased. She sells billboards in a high traffic location. If the advertiser doesn't want to pay for the exposure there's another company standing in line waiting to take their spot.

 

[neocoven]

Monolith, click-fraud is on serious level right now due to clicks from under 3rd level search engines which offer incentive for clicks.

If you know about Pay to Click or Pay to Read programs, it might be easy to understand how click-fraud is serious.

Even some search engines claiming that they don't have any incentive clicks also have partnership with these 3rd, 4th or below level search engines and these partners bring incentive clicks to upstream partners.

So, for example, if you are advertiser, and pay $100 for advertising with $2.00 bid, it will be disappeared instantaneously without any selling due to click fraud from low level search engines.

 

[JMJ]

Monolith, click-fraud is on serious level right now due to clicks from under 3rd level search engines which offer incentive for clicks.

If you know about Pay to Click or Pay to Read programs, it might be easy to understand how click-fraud is serious.

Even some search engines claiming that they don't have any incentive clicks also have partnership with these 3rd, 4th or below level search engines and these partners bring incentive clicks to upstream partners.

So, for example, if you are advertiser, and pay $100 for advertising with $2.00 bid, it will be disappeared instantaneously without any selling due to click fraud from low level search engines.

Trying to reinvent the wheel doesn't do you any good. Making modifications will. Those who wish to cheat get no money. Even if 3rd and 4th levels are the ones doing it 1st and 2nd should be held accountable. Eventually they will clean up their act and become legitimate. It happened in the domain industry and you are witnessing it as we speak. TypoSquaters are having to try and find a new home for their names. Large portfolio owners are realizing a quick buck doesn't equal a future so they are dumping those names. Sure someone else will come along and pick up the name but what are they going to do with it other than hand it over to the TM owner or get sued?

 

[stscac]

Very eloquent indeed but your statistics are basically flawed...

Not necessarily, they just omit the small advertisers.

I await your equally eloquent rebuttal.

This should be good

There will always be a need for PPC.

Just like there was a continual need for the 8-track player.

-Steve

 

[JMJ]

Not necessarily, they just omit the small advertisers.This should be good
Just like there was a continual need for the 8-track player.

-Steve

They didn't reinvent music, they made modifications to how it is produced and distributed.

 

[Monolith]

Very eloquent indeed but your statistics are basically flawed because you are painting a scenario that spans years when the reality is the majority of advertisers are small time, one shot, joe blows who may only be in it for a few weeks. So fraudlent clicks will utlimately mean the small advertiser loses his investment, period. I'm really at a loss to see how you fail to grasp the most simplest of concepts. If I bid $1 per click and you send me 100 fraudulent clicks your happy because you get my $100 (until Google ban you) but ultimately I'm pissed. The net effect of all this is that the majority of advertisers loose faith in the adsense model and spend their advertising revenue elsewhere which ultimately hurts 99% of Webmasters (the ones that don't play stupid games).

I await your equally eloquent rebuttal.

Lux

Why do you think my scenario spans years? With AdWords, the bid price is adjusted in real-time based on advertiser ROI and conversion data. If Joe Blow with his $100 jumps in on a search term for a day, the odds of all of his money being pissed away into spam portals is nearly impossible. Sure, some of it probably will be, but the bid price takes that into account.

I could see how your example might apply if there were very, very few advertisers and very, very few publishers for a particular search term... but thats a rare occurance on AdWords these days.

Besides, all that aside, there's still the site-specific targeting, which makes click-fraud almost laughably obsolete.

 

[luxinterior]

Why do you think my scenario spans years?

That would of been this line from your OP...

Now, lets move a year into the future.

Lux

 

[Mark]

I'd say the only person who would start a thread such as this - Has never paid for PPC advertising in their life ..... It's just plain Stealing - Nothing else to be said for it. The "Losses" will always be handed down to the consumer -

 

[snoop]

So, each click is only worth 75% of what they were paying a year ago - $3.75. Since the amount advertisers pay is completely up to them, the high bid for the industry drops to the highest sustainable amount of $3.75 (since paying any higher would result - long term - in a loss).

As time goes on and more spammers dilute the traffic, the price per click simply drops to match. For the advertiser, it makes no difference - the bidding system ensures that they never pay more. As the bid price drops, their marketing budget stays the same - so theyll simply be generating more untargeted traffic to their sites instead of less targeted traffic. Either way, theyre still getting the same number of sales.

Of course, assuming there were no intervention, this could eventually reach a point where the traffic is 100% noncontextual/fraudulent... but even then, the bid-per-click style works in their favor, since if 1 out of every 1000 untargeted visitors results in a sale, that traffic still has value - albeit at a very low cost per click.

You need to consiser the publishers side of it aswell (the supply side).

Under your scenario legitmate publishers make almost nothing, the end result is every legitmate operator moves to new systems due to low payouts. Only the fake clickers stay, and when no legit traffic remains, bids will fall to $0.00, end result would be the death of the ppc industry.

 

[barefoottech]

I'd say the only person who would start a thread such as this - Has never paid for PPC advertising in their life ..... It's just plain Stealing - Nothing else to be said for it. The "Losses" will always be handed down to the consumer -

Mark,100% Spot On


Monolith , Click - fraud is Not only Stealing ,it is just plain Stupid.

Why should I give my advertising Money to some little spotty faced prick ,when it can be better spent on a WebSurfer that may buy something.

 

[JMJ]

Mark,100% Spot On


Monolith , Click - fraud is Not only Stealing ,it is just plain Stupid.

Why should I give my advertising Money to some little spotty faced prick ,when it can be better spent on a WebSurfer that may buy something.

On the flip side why should I give my traffic or ad space to a company who might not pay me for sales made?

 

[mole]

On the flip side why should I give my traffic or ad space to a company who might not pay me for sales made?

Affiliate marketing is a whole lot more than just sticking a CJ link on your website, maybe you want to think about the http://www.moneyhome.com concept?

 

[wildbest]

Click fraud is a VERY serious issue that will destroy the PPC ads. See just one example - FindWhat! They are out of business because they became too dependant on click fraud networks. These criminal networks generated most of the revenue and FindWhat gradually lost all their advertiser base. It is the same case with LookSmart. Gone! They couldn't afford to fight the fraud because at a point they became financially too dependant on it!

Our estimate shows that at least 40% of all the clicks in AdSense is fraudulent. More than 50% of the clicks on Yahoo is fraudulent and another 30% is of competitors clicking on each others ads... It is frightening! And I do not see much value in PPC ads these days.

Google is diversifying! They acquired Urchin not only for the convenience of their AdWords advertisers. They are preparing for the CPA model in the near future!

 

[JMJ]

Sign me up for the free traffic program any day.

Affiliate marketing is a whole lot more than just sticking a CJ link on your website, maybe you want to think about the http://www.moneyhome.com concept?

"How To Get 1 Million Visitors Without Paying A Dime In Advertising"

LMAO PPA advertising..

 

[Genialnames]

I don't would be worried about click fraud, not only.
It is the attitude to fraud the problem.
And the conditions that bring too many person to do that.
IMHO

 

[Reppy]

Our estimate shows that at least 40% of all the clicks in AdSense is fraudulent.

How did you come up with that estimate?

Gut feeling?

Or other?

How are you defining 'fraud'?

 

[gmac17]

Monolith, you don't get it.

Let's pretend I make $1,000 per day using PPC and things are pretty good. Suddenly a competitor comes along and gets a bunch of friends to click on my ads for a total of about 50 clicks per day - I pay $2 per click.

Well, I'll still be making $900 per day, but this jerk can cost me $36,000 per year without really trying too hard. This is no different than someone coming in off the street and taking $36,000 out of my safe - and it happens ALL THE TIME.

 

[mole]

"How To Get 1 Million Visitors Without Paying A Dime In Advertising"

LMAO PPA advertising..

Nah, the type-in folks call it direct navigation :hehe: