Report on Pay-Per-Click Fraud Out

I think the first time I mentioned this issued to a client was 3-4 years ago. It seemed only natural that pay-per-click ad fraud would be a problem.

The way PPC ads work is that you set a dollar amount you're willing to pay each month, and once that limit is reached, your ads no longer display. Your competition could chew up your budget in a day or two and move on to their next victim.

I got a report today by Doug Caverly of WebPro News that says:

"Market researcher Outsell Inc. has determined that click fraud is a big issue-"big" in the sense of a "$1.3 billion problem." Their study also found that the issue has driven advertisers to spend less money with the major search engines.

On that subject, one of the topic headings claims that "On Average, 14.6 Percent of Clicks Are Fraudulent." And as the San Francisco Chronicle reports, the study also found that "three-quarters of advertisers said they had been victims at least once." Taken together, these statistics indicate that a lot of money has been wasted on advertising.

The Chronicle also reported that "27 percent of advertisers reduced or stopped spending on click-based advertising." Also, "an additional 10 percent said they intend to curtail spending." And Chuck Richard, the vice president of Outsell, made a comment in the report. "In our opinion, it is not acceptable that advertisers fund the illicit profits of the scammers," he said.

Outsell's statistics are ground firmly in reality. The "survey was based on the responses of 407 online advertisers representing a cross-section of U.S. business. Their spending ranged from several thousand dollars online annually to more than $10 million." Click fraud is obviously a huge problem affecting all sorts of companies."

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About the Author:
Doug is a staff writer for WebProNews.

Moral of the post is if you're going to use PPC, be sure and track the click-throughs AND the conversion rates/amounts very, very carefully to make sure you're getting what you paid for.