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Web Analytics Vendor warns a fifth of pay-per-click activity may be Fraudulent.
ClickTracks Analytics has introduced updated software for detecting click fraud, saying that an average of 20 percent of a company’s pay-per-click adverting budget can be traced to fraudulent activity.
The problem stems from individuals or companies trying to increase pay-per-click online ad traffic through illegitimate means. By driving up traffic on ads that show up next to search results, they would get more revenue from the advertiser.
In some cases, the fraud involves using software robots to do the extra clicking, or hiring people to click repeatedly on the ads.
The Santa Cruz, California-based company’s products, ClickTracks Professional and ClickTracks JDC, compare different statistics from the ads and highlight variances that show evidence of suspicious activity. The technology works with the Google, Yahoo, and MSN search engines.
The software highlights statistics such as the number of clicks that come from a certain country, the number of sessions with no referrer site for the click, and the number of different IP addresses.
‘An automated bot flies right underneath the wire.’ says Michael Stebbins, of Clicktracks.
Joe Tedd, operations manager at the New York City-based diamond e-tailer DiamondHarmony.com, has been testing the products on his site. “Since we began using it, which was at the start of the holiday shopping season for ’05, it helped us identify up to $10,000 in fraudulent clicks,” he said. “The tool paid off for us in the time we began beta testing.”
DiamondHarmony spends close to $30,000 per month on online advertising. Mr. Tedd said that without a click fraud tool, his company would not have noticed suspicious activity until much later this year.
At first, he had difficulty confronting the search engine where the suspicious activity originated. The company wouldn’t believe him until he produced detailed reports that prompted the search engine to acknowledge there was a technical glitch and give DiamondHarmony a refund.
While the technical glitch by itself accounted for a proportion of the extra clicks on his company’s ads, Mr. Tedd believes some fraudulent activity also occurred that exploited the technical glitch.
“We debugged something for them that they had never encountered before, and they realized the issue was something on their side,” he said.
Michael Stebbins, vice president of marketing at ClickTracks, said there are click farms run from India and China that drive up click traffic, and sophisticated software robots that can be difficult for many web advertisers to detect. “An automated bot flies right underneath the wire,” he said.
ClickTracks’ 7,000 customers include major companies like Coca-Cola, Intuit, NASA, Nokia, Nordstrom, Pfizer, and Volkswagen.
Pay Per Click (PPC) advertising is big revenue for Google, Yahoo, and MSN and getting more expensive all the time.
Indeed, BlueNile, a leading diamond e-tailer partly ascribed their lower 4th Quarter 2005 earnings results to significantly increased PPC advertising costs.
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