Online businesses are being warned to watch out for the growing threat of click fraud, with local experts and the head of Bing’s anti-fraud unit saying the amount of fraud occurring could be as much as 10% of all search revenue.
Reseo chief executive Chris Thomas says click fraud has been around for years, but is growing as a problem as users start becoming more sophisticated and use new techniques.
“It is a problem, and the bigger you are and the bigger your advertising budgets, then more of this is likely to be occurring,” he says.
Click fraud occurs when a user, or a group of users, organise to make multiple clicks on ads in order to artificially inflate both the revenue gained from that ad, and the site’s prominence in Google and Bing rankings.
But click fraud is also used as an attack on other sites. Because a company will spend a certain amount of money for an AdWords or Bing campaign per click, eventually when their ads receive a certain number of clicks they will disappear – click fraud attempts to make this happen faster and erase their ads from the web.
Bing head of fraud Eric Bozinny told a social marketing conference in Australia recently that click fraud could be generating as much as 10% of all search revenue.
“Definitely, search fraud is on the rise,” he said. “In the US it’s going up steadily every year. If search in Australia is worth $1.1 billion, we’re assuming $110 million in fraudulent revenue.”
Thomas says there is definitely click fraud occurring in Australia, but admits that its real contribution is “impossible to know”.
“I don’t really think any of the search engines themselves know. It’s just so hard a figure to pin down,” he says.
“I actually saw this particular presentation, and some of the techniques that were being described are amazingly sophisticated. The Bing fraud team has about 40 people on it, and if they’re devoting that many resources no doubt it’s a massive problem.”
Stewart Media chief executive Jim Stewart says click fraud is “definitely” a growing problem, and not just because users will click on their own ads in order to generate revenue. He says click fraud is becoming more common as an attack to deplete a competitors’ advertising budget.
“There are entire networks out there where people will set up to click on each other’s sites in order to gain revenue, but it’s also occurring that competitors click on your ads to run out your budget.”
Bozinny demonstrated to a crowd during his presentation recently the results of a Bing investigation – a group of users were artificially clicking on all of the advertisements appearing on one particular search result except for one.
Google disputes Bing’s figures, saying click fraud the company filters is “consistently less than 10% of clicks”.
“Because of the broad operation of our proactive detection, the relatively rare cases we find of advertisers being affected by undetected click fraud constitute less than 0.02% of all clicks,” it said in a statement.
“It is unclear how exaggerated click fraud estimates are developed, but they very likely reflect a self-interest to hype the problem and include clicks we have filtered – and not charged to advertisers.”
Nevertheless, Google does not deny click fraud exists, and these experts say businesses need to be aware of how it could affect their business – either if they are using fraud to generate revenue, or are being attacked by a competitor.
“You need to monitor your click-through rates and monitor what’s actually going on in your website to determine what people are watching and why they are there,” Stewart says.
“You also have to ask, what is a click worth to you? If you know for instance that if you put a value on a lead or phone call coming into the business, you can monitor those costs against what you’re paying for clicks.”
“You have to put a value on what you’re getting out of it and then adjust it when the opportunity arises.”
Conversely, Thomas says businesses shouldn’t even try clicking on their own ads to generate revenue – unless you’re using sophisticated techniques the anti-fraud teams at Google and Bing will most likely find out what you’re doing.
“Eventually they will find out. They have huge anti-fraud teams and when they see anomalies like this occur, that’s when they start to investigate.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
