Click fraud has been an been an issue for as long as pay per click as been around. There has been renewed media interest in the topic since Google settled a lawsuit for $90 million. As it stands now click fraud is an annoyance - it’s one of the costs associated with running a paid search campaign. A cost that can be difficult to determine and is often ignored until it starts having a noticeable impact on your campaign.

The search engines are trying to detect click fraud and not charge for the fraudulent clicks but this is a battle that is difficult to win. A skilled fraudster can probably outwit any algorithm they come up with.

One solution is to change the model from pay per click to pay per acquisition. There has already been a move towards this with the increasing popularity of pay per call. Google has also been testing this. Bill Gross, arguably the father of the PPC model, is promoting a pay per action model with one of his start-ups, snap.com. This model is a lot harder to defraud. If you want to spend your competitor’s advertising dollars you can click on their ads and buy lots of their products - but I don’t think they’re going to get upset.

So how is this relevant to SLI? We have some experience in detecting this type of behavior. We have techniques to ensure that one person’s activity can’t unduly influence the learning on any of our customers’ site searches. In the past when we have detected this behavior they have been crude attempts to influence the results. For example a keyword that normally gets 2 searches a day, suddenly gets 30,000 in one day from a single IP address. If you’re going to do click fraud - don’t use a sledge hammer - be subtle about it.

This is also relevant to us for our Ad Champion service. This automatically creates and manages paid search campaigns from the data we collect from site search activity. We are very wary of click fraud happening on these campaigns which we are running for our customers. We have an advantage though - because these campaigns are operating mainly in the search tail. In order for click fraud to be successfull our customers’ competitors would have to spread the clicks over lots of keywords and it’s difficult to work out what they are. If there’s a sudden increase in clicks on a keyword that normally doesn’t get searched for very often - then it stands out like a sore thumb.

For our Site Champion product, which automates search engine optimization for tail terms, we charge either on a cost per click or a cost per acquisition. The cost per click is susceptible to fraud (although we haven’t seen it yet), but because it’s operating in the search tail, it too will be difficult to defraud. The cost per acquisition model is risk free for our customers but there is an overhead to tracking the sales. I predict that the risk free appeal of the cost per acquisition model will mean we will see it more and more in the major search engines.

This entry was posted by Shaun Ryan on Tuesday, March 28th, 2006 at 10:09 am PST and is filed under Uncategorized. You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.