The Twelve Ways of Click Fraud

As I mentioned previously, while I’m more skeptical than most, when it comes to talk of click fraud rates being over 20%, I still like to provide balanced posts. Along that theme, I asked long-time reader, and resident click fraud aficionado, Mike O’Krongli, to share his thoughts on Google’s click fraud filtering and balance out my original post.

If you’ve read Mike’s scary post describing how click fraud “zombies” could inflict massive amounts of click fraud, without being detected, you’ll appreciate his “Twelve Ways of Click Fraud” (sung to the tune of 12 days of Christmas, how festive!).

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The 12 Ways of Click Fraud

     This week while humming along to the 12 days of Christmas, I counted 12 reasons to question Google’s estimate of only 2% click fraud.

     1. Google earned $ 1.52 per month last quarter for every internet user over the age of 4 that use the internet 1 day a month (109 million)  Less than 50% of internet users use the Google search engine.  When you consider that many users do not click on PPC ads at all, the ones who do must click on a larger number.

     2.  There are many other things occupying the time of internet users besides search.  Video has become very popular and in the first year of YouTube.com’s life, over 9,000 years of video had been watched.  Email, Instant Messaging and sites like MySpace would also take time away from clicking on a PPC link.

     3.  I question the steady increase in PPC revenue quarter over quarter.  Other forms of internet advertising have always experienced a drop in interest over time.  One of the main reasons I don’t click on PPC ads is because I find them to be ineffective.  Any that I have clicked on turned out to be disappointing.

     4.  What’s with Google’s recent increase in click fraud PR surrounding PPC?  Between Matt Cutt on a debunking quest and Shuman Ghosemajumder’s recent meeting with Andy Beal, the Google PR machine seems to be working overtime.  Shuman tossed in a red herring by introducing the term “invalid click” into the click fraud discussion.  Invalid clicks should be an internal metric used only by Google.  Invalid clicks have no place in the click fraud discussion.

     5.  Bid rates for competitive keywords has been on the decline.  The only reason for this would be a lower ROI on those keywords.  This sends savvy AdWords customers further down the “long tail” in search of quality leads and better value.

     6.  When AdWords customers travel further down the tail, it bolsters the click fraud network.  The long tail hides a well written network.  Quality bot networks would access the fraud site through Google’s own search engine results.  By achieving this connection, the PPC transaction is given more weight and undergoes less scrutiny than other sites.  To score high enough in the listings, the fraud site has to use terms in the long tail. 

      7.  This long tail also enables search arbitrage.  This practice involves buying AdWords at a low bid price and directing the clickthrough to an AdSense website with higher paying PPC links.  Mix some of this practice into your click fraud network to water down the clicks coming from the bots. 

      8.  Search arbitrage encourages multiple PPC service abuse.  The fraudster uses an AdWord account to send leads to a Yahoo, MSN or Ask optimized page.  In this case the money is paid to Google and removed from the other company.  This can also work in reverse to further cloud the issue. 

      9 .   Advanced bot networks have been found producing SPAM email from infected computers.  Some have even installed anti-virus filters themselves.  This is in an effort to keep the bandwidth and processing power for the bot.  Some operate in a peer to peer method.  This allows the network to be run by one machine and be restarted by a totally separate machine.  We catch email bots because they leave millions of spam email as evidence.  Click fraud bots leave no evidence.

     10. There is a strange, cult-like feel surrounding Google’s privacy policy in both the AdWords and AdSense networks.  Repeated public searches yield very little information about AdSense compensation or average keyword pricing.  With little comparison data, it is hard to conclude whether your account activity is normal or inflated.  Rumors of immediate dismissal for TOS violations are commonplace if you do uncover data.  The only testimonies available are from account holders with very low AdSense compensation.  By banning these sites, Google gets two positive outcomes.  First, other publishers hear these stories and are scared straight.  Second, they remove what amounts to an administration drain on the system.  If accounts don’t pay every couple of months, it is not worth the effort supporting them.

     11.  Click fraud is really only a concern for those AdWord accounts in which Google is paying a publisher.  It makes very little sense for click fraud to be present on any site that Google owns.  Unless someone is trying to max out a competitors account, there is no financial gain.  From my best research, Google allows you to opt out of Google but does not offer a “Google only” option for AdWord customers.  By mixing in the publishers (AdSense accounts) to the pure Google network, they hide the true rate of click fraud.  The baseline metric missing is the pure click through rate on the Google properties alone.  That would give a good indication of inflated conversion percentages in other areas. 

     12.  The way that Google handles new accounts make me question their ethics.  Many pitfalls for new accounts are outlined in this article http://blog.merjis.com/2006/10/04/googles-evil-way-with-content-match/ including $ 5.00 minimum cost per click and initial set up including the content network.  The content network is where the highest rates of fraud are reported.  Since Google creates very little content, nearly the whole sub-area is AdSense accounts.  It is those accounts in which the fraud lives and hides.  AdWords does allow customizing of which sites your ads will be shown but only as an advanced feature. 

      …. and a partridge in a pear tree. 

About Mike

Mike is the CEO and CTO of Acorg Inc, a startup company focusing on the local search marketplace. Mike has been following the search industry for nearly 10 years. He has worked in the computer operations department of two large Canadian companies. With solid skills in UNIX, scripting languages, Perl and relational databases coupled with small business management experience, Mike has a unique perspective on Internet business.

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So what are your thoughts? Is click fraud a big deal or does Google have it under control?