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Don't Think Click Fraud, Think Negative ROI
March 1, 2007 |
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The search engines have a dilemma on their hands when it comes to click
fraud. We're all clamoring for more information on the issue. We all
want solid numbers to help us define the scope of click fraud. The very
fact that we refer to it as click fraud is confusing. A lot of things
get thrown in the click fraud “basket” that are in no way fraudulent.
Thanks to sensationalist reporting by publications like BusinessWeek,
click fraud is portrayed as the biggest scourge to threaten the Nirvana
that is search marketing. A tremendous number of resources have been
dedicated towards click fraud by the engines themselves, in response to
the advertiser’s demand that the problem be stamped out.
But when you do an honest appraisal on the issue, the search engines
would rather we get over our preoccupation with click fraud and start
thinking of it as part of a much bigger whole, the return we get on our
search marketing investment. This in no way negates the importance of
click fraud as an issue. I don't think there’s anyone more aware of
click fraud than Shuman Ghosemajumder (Google), John Slade (Yahoo), and
Brendan Kitts (Microsoft). They're the first to say that click fraud
does exist and that they’re each, in their own ways, actively policing
at. It's more a question of proportional response, an appropriate amount
of attention given the actual scope of the issue. And today, for the
first time, Google is giving us concrete numbers on what that scope
might be, at least for their network. Google is announcing a multiphase
approach and product road map to handle the click fraud question.
Accompanying the announcement are hard numbers, for the first time,
about how much of Google's traffic could actually be considered
fraudulent. I'll talk more about the numbers in a moment, but first,
let's explore the dilemma that presents itself to the engines.
Caught between an Over Hyped Threat and an Ignored Danger
The engines know, as a factor that negatively impacts return on search
marketing investment, click fraud represents a tiny percentage. There
are far bigger drains on the performance of campaign that advertisers
should be paying significantly more attention to, but thanks to doom and
gloom "exposés", there's a disproportionate amount of attention focused
on click fraud. So, although the engines would rather advertisers focus
more on the big picture and consider all the factors, including
fraudulent traffic, that are negatively impacting their return on that
investment, they’re playing the game they have to and are keeping the
focus on click fraud. Google's announcement today may allay some of the
"sky is falling" concerns that are being whipped up by journalists, but
in the long run it may do the advertisers a disservice by diverting
attention from more pressing campaign optimization issues.
I've talked about some of this before, but here are some of the issues I
have with the current click fraud situation:
Just Because We Call it Fraud Doesn’t Make it Fraud
Click fraud seems to be the label that has stuck with this particular
issue. There have been calls to try to put numbers around the occurrence
of click fraud in search marketing. In reality, it's not that cut and
dried. First of all, fraud implies that someone loses money through the
deliberate actions of someone else. For a click to be fraudulent, at
least in the way the BusinessWeek tried to define it, the advertiser has
to lose money. They have to be paying for traffic that has no value.
Less than 10% are Invalid Clicks
The fact is, there are a number of factors that may result in traffic at
the advertiser would probably prefer not to pay for. Fraudulent traffic
is just one of them. Google puts all this traffic into a basket they
call invalid clicks. This includes double clicks on ads, questionable
activity from a single IP address, automated clicks, and yes, clicks
from the nefarious click fraud perpetrator. In today's release, Google
said this was less than 10% of their total network traffic. They didn't
want to get more specific than this, because the actual percentage can
rise and fall with a fair amount of volatility, based on spikes in
clickbot attacks and other factors. Google works to filter this traffic
out proactively, so it's as if the clicks never happened. The advertiser
is never charged for this traffic. In most cases, the publisher of the
site from which the traffic is generated is never paid for the traffic.
No money changes hands, so no fraud has been committed. If anyone is out
of pocket, it’s Google, not the advertiser.
The Bottom Line for Advertisers? .02%!
The traffic that the advertiser should be concerned about is the
fraudulent traffic that slips through the cracks. This is truly click
fraud. It's not caught by the Google filters and it's up to the
advertiser to come back and report it and request a refund. In this case
money has changed hands and fraud has been perpetrated. Today, Google
announced that this represents .02% of their total traffic. Some time
ago I did
a column after a talk with Shuman at Google and after making some
assumptions and extrapolating the number I came out with an “worst case”
estimate of .2%. It appears that my worst case was much higher than
reality, by a factor of 10X
I don't know about you, but frankly if something is only making a .02%
impact on my advertising campaign, I've probably got better places be
spending my time. One place you might want to look? The conversion rates
of your landing page. If you can bump your conversion rates by .5%,
you’ve just made 25 times more impact on your overall campaign
performance than by continuing to fret about click fraud on Google.
Google's announcement today was more than just releasing numbers on the
occurrence of click fraud. They are also announcing the creation of a
Click Fraud Resource Center, a streamlined reporting process, the
ability for advertisers to filter out questionable IP’s, more details in
their invalid click reporting and some other initiatives. I believe all
these things are good and are needed by advertisers, if only to put to
bed the perceptions of click fraud as a major issue, but do me a favor,
will you? Take some of the time you may be spending worrying about click
fraud, and start looking at all the other places where your return on
investment may be slipping through the cracks. My guess is there a lot
bigger cracks you should be looking at than the click fraud one. |
Gord Hotchkiss
President and CEO
Enquiro Full Service Search Engine Marketing
Search Engine Positioning by Searchengineposition
Blog: www.outofmygord.com
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