The first step in curbing click fraud is to recognise and track cases of click fraud. Click fraud is a huge drain on advertiser resources nationally and internationally and accounts for around 30 % of all pay-per-click advertising spend. It's no surprise that the search engines are investing so much time and effort in developing solutions.
IP address repetition algorithms are one way that search engines and other pay-per-click programme providers have attempted to combat the growing problem of click fraud. These equations have been developed to recognise abnormal click patterns originating from a single IP address. This can help in the detection of click farms and competitor-driven sabotage, as well as identifying potential fraudsters at the source.
However, this method of attempting to identify the fraudsters has a number of shortcomings. Firstly, fraudsters using a dial-up modem, DSL connection or cable modem can almost completely bypass this check, as each new online session generates a new IP address. There is also a wide range of IP address changing software that can be used to "trick" the algorithm again.
Other means by which search engines can attempt to detect suspected fraudulent activity are cookie and session tracking, but these too can be circumvented by fraudsters. Increasingly comprehensive software is being developed that profiles and reports on the habits of every click-browser, allowing companies to track and monitor suspicious behaviour. Many people find this intrusive and ineffective as anything small scale is likely to go unnoticed given the wide reach of advertising online.
The issue of click fraud recently hit the headlines when a class action lawsuit was filed against Google, resulting in the company proposing a $90 million settlement. Google's offer, which can be interpreted as an acknowledgement of its obligations, points to the extent of click fraud and its enormous consequences for the internet economy.
To keep a business out of trouble, there are a number of self-help measures that can be employed. Relying on search engine optimisation and organic listings is the first of these solutions. If a website is well optimised, it can eventually get a ranking that another website is willing to pay $2.50 per click for. Since there are no click-through rates associated with organically high rankings, the costs associated with PPC are also eliminated.
Although the SEO process is more time-consuming and takes longer to see results, it is much more cost-effective in the long run. And with an estimated 25-30% of all clicks being fraudulent, ranking high organically can save money that would otherwise be wasted on click fraud, allowing for a more beneficial reinvestment.
As the market for pay-per-click advertising grows and expands year on year, click fraud will undoubtedly follow suit. Until an effective method of preventing click fraud is developed and successfully implemented, buyers will gradually lose faith in the advertising medium and turn to more effective, less wasteful marketing methods, causing search engines to suffer and potentially jeopardising the entire online economy.
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