Bidding on Keywords? Click Fraud?

If you’re considering or already bidding on keywords on the Internet (known as Pay Per Click advertising or PPC), there may be important issues which you have not considered. If you know what you’re doing, bidding on keywords can be quite profitable, however, there are pitfalls which can cause you to literally throw your money in the garbage. This article will cover one of them, click fraud.

Click fraud occurs when a click is intentionally generated by a third-party who knows that a click will be generated without a valid visitor being delivered to your web site and that your account will be debited for the fraudulent visit.

There are several types of perpetrators who generate fraudulent clicks. Fraudulent clicks can be generated by competitors, PPC affiliate web sites, and even PPC companies.

Large PPC companies such as Google and Yahoo, which are the two largest and which cover most of Internet searches, do not engage in click fraud and in fact spend a substantial amount of money to prevent it. For obvious reasons, Google and Yahoo do not disclose how their click fraud software works, however, one example of what they look at is the number of clicks coming from a single IP address. If there is a large number of clicks coming from the same IP address over a short period of time, they will screen the traffic. One reason this is a difficult task, is that some Internet service providers, such as AOL, use shared IP addresses for their users. One way to attempt to limit the amount of click fraud is to avoid PPC companies which depend solely upon affiliate web sites for traffic, since affiliate traffic is less reliable. PPC companies such as Google and Yahoo receive a substantial amount of traffic directly to their web site, while some PPC companies receive all or most of their traffic from affiliate web sites.

Some of the smaller, usually unheard of, PPC companies will even itself engage in fraud, billing you for fraudulent clicks. I myself was once taken in by a company, which was unknown to me, and which offered thousands of free clicks if I opened an account. The company fraudulently claimed that the thousands of free clicks were used up within hours. I immediately closed the account and disputed the billing with my credit card company.

While Google would not engage in click fraud, they allow web sites to become affiliates. This means that anyone with a web site can display Google advertising and share, with Google, the revenue generated from people clicking on the advertising. Although Google has software to detect an unusual number of clicks from the same IP address, an affiliate could potentially click on the advertising to generate income. Criminals usually come up first with a new way to commit a crime, while those who try to catch the criminals are usually just behind.

Competitors can easily find your advertising, simply by searching for keywords that they are bidding on. Your competitor may find that you are bidding $23 to be in the first position, while your competitor is in second position. Your competitor could potentially click on your advertising from several different computers every day in an effort to increase your advertising costs to a point where you might decide that it is not worth it, lower your bid, thus dropping in position leaving your competitor in position number one.

There are several ways that clicks are fraudulently generated. Software exists that automatically clicks on PPC ads to generate fraudulent clicks. In this instance, no one lands on your web site, but a click is generated for which you are charged. This type of fraud can result in a substantial amount of fraud and exists solely for the intention of generating a fraudulent profit for a web site which is an affiliate of a PPC company or even the PPC company itself.

A competing company may perform searches for keywords it is bidding on and manually click on its competitors in an effort to increase their advertising costs thus encouraging them to lower their bids. A web site owner who is an affiliate of a PPC company could manually click on advertising links, which appear on the affiliates web site, from several different computers with the intent of generating profits for themselves.

Equally complicated, is choosing which keywords to bid on. Knowledge of your practice and your clients is very important in determining which keywords to bid on. This will be covered in another article. As usual, when something as complicated and can result in substantial cost, there are usually companies available to help you out. Such companies will make sure that you bid only on keywords that bring you the traffic you’re looking for and can monitor your PPC campaign for effectiveness and fraud. One such company which has a very impressive client list and specializes in managing keyword bidding and search engine optimization for lawyers and doctors is EinsteinLaw.