Avoiding Click Fraud

Q: I want to start using Google AdWords, but how do I avoid “click fraud?”

A: Online advertising has become one of the most cost-effective and trackable forms of marketing available. Estimates for online advertising spending in 2005 ranged from $15 to $20 billion and expectations for 2006 are for an increase of more than 25%.

Amongst the most common methods of advertising online is a method known as Pay Per Click (PPC), which is usually associated with a search engine.

The basic premise is that you can bid on search phrases that you believe will put your ad in front of customers that are actively searching for your product or service.

Depending upon your bid and the number of competitors that are also bidding on that search phrase, your ad could appear at the top of the page or somewhat lower.

At first glance, getting your ad to the top of highly used phrases seems to make the most sense, but that is where many newcomers to PPC advertising can quickly fall prey to click fraud.

There are two major forms of ‘click fraud’ when it comes to PPC advertising in Google: competitors clicking on your ad to drive up your costs and smaller Web sites that get paid by Google to host your ads on their site (referred to as the Content Network).

If the phrase you are bidding on is very competitive, you will have to pay more per click and you will have more competitors that can click on your ad and waste your advertising dollars. Avoiding very competitive phrases will reduce the amount of money you will have to pay per click and reduce the chances of lots of competitors clicking on your ad. (Google can tell if the same computer is continually clicking on the same ad and will not count that against you, but there are other ways for competitors to waste your clicks.)

The ultimate goal in PPC is to get as many clicks as you can for your budget, so getting the top ad position may actually work against your budget. A customer is a customer, regardless of what they typed to find you, so instead of wasting your budget on a few highly used phrases, go after hundreds of less-used phrases that will cost you a fraction on a per-click basis.

Let’s say your daily budget is set at $20 and you want to target a very common phrase like ‘real estate’ because it generates a lot of traffic. If the cost per click bidding is $1, you can only generate 20 clicks per day (and many of those may be your competitors).

If you work to find a bunch of lesser trafficked phrases that relate to the main phrase (unique real estate, real estate in xxxxx, real estate help, etc.) and you only have to pay 20 cents per click, you will increase the number of clicks per day to 100 for the same $20 and reduce the percentage of clicks by your competitors.

The Content Network, on the other hand, allows anyone that has a Web site to host your ad and get paid every time someone clicks on your ad at their site. Lots of people set up hundreds of meaningless Web sites to host these ads then try to get as many people as they know to click on these ads to drive up their clicks.

In my opinion, disabling your ads from appearing on the Content Network until you really understand how to use it is critical.

I, as many others, wasted a lot of money on Google AdWords in the beginning because I had no strategy. Understanding how to optimize your ad dollars in PPC is critical, so I highly recommend reading The Definitive Guide to Google AdWords by Perry S. Marshall & Bryan Todd. It saved me a fortune in mistakes!

Ken Colburn
President of Data Doctors Computer Services
Host of the award-winning Computer Corner radio show
Author of Computer Q&A in the East Valley Tribune newspapers