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Friday, May 06, 2005

Google Adwords CPM Fraud

"Advertisers on Google affiliate sites bid on premium ad space based on the number of times visitors come to a specific page. As with clicks, the contract is for a predetermined number of impressions. Once the impressions are exhausted, the ad falls off Google’s display list, bumping up the position of an ad placed by a competitor who has paid less, unless the advertiser renews the contract. "

Funny how I talked about this yesterday. It is a more complex process to track impression fraud, has Google figured out a way to make sure I cant use a few AOL proxy IPs and bring down your Google CMP ads in a matter of days (hours)?

Full Story: Google’s move to CPM creates a new fear for marketers—impression fraud

Thursday, May 05, 2005

Chicken Little Redux: "The Sky Isnt Falling"

Dana Blankenhorn blogs:
"But the sky is not falling. Click fraud is not destroying Internet advertising. In fact, business is booming. CP/M (as in cost-per-thousand) programs are making a comeback. Sponsorships are on the rise."

I guess the sky is never falling...till its your sky. Advertisers of all business sizes have been affected by click fraud. Some have had to cutback on spending or even pull out altogether because of their losses.

When you consider that the PPC fraud war is two fronts (your competitors and rouge site publishers running your ads) it makes the dangers very real.

"In fact, business is booming."
Of course it is. GartnerG2 pointed out at a conference I attended, through an enormous amount of data and statistics, that the #1 way for advertisers to reach teens and young adults is the internet. This combined with the continued growth of broadband is turning the PC into an every day appliance and the search engines into an every day application.

CP/M (as in cost-per-thousand) programs are making a comeback.
Of course they are. Now that Google has implemented a CPM solution with site targeting technology and the fact that pay per click (PPC) fraud is starting to be heard of more and more for what it is. But how long till the fraudsters F5 refresh your CPM campaign into oblivion from some dynamic IPs (or AOL Accounts)?

"Sponsorships are on the rise."
Of course they are, those links do wonders for your natural search engine rankings (SEO). However, SEO is only part of the strategy for search engine advertising, with pay per click (PPC) being its other half.

The fact is the sky isnt falling for everyone, some dont even know whether it is falling or not and some dont even know to look up to see. But for those who have and are trying to work through it its good to know that there are tools to monitor and fight pay per click (PPC) fraud.

Click Fraud Threatens Rising Online Ad Revenue

Information Week has a nice recap/update article for the highpoints of what happening in the pay per click (PPC) world.

Information Week reaffirms what Ive been saying about click fraud accounting for 20% or more of all clicks depending on what industry your in (and how much your paying out for ads).

Joel Fineberg, the attorney for Lane's Gifts & Collectibles and Caulfield Investigations who are suing Google, Overture and other PPC networks, comments that he is"...seeking to bring some certainty and integrity into the system. We believe it is inherently unfair to charge customers for services which aren't being provided"

"Cost-per-click advertisers who are advertising within highly competitive niche markets, in which a high per-click cost is justified by a very high return on investment, can often be the most vulnerable to click-fraud activity--both competitor and network partner click fraud."
- Jessie Stricchiola, president of Alchemist Media Inc.

Full Article: Click Fraud Threatens Rising Online Ad Revenue

Hacker-run DNS nameservers used for PPC click fraud

Hackers are using networks of comprimised machines (zombie machines) to deploy rapidly changing DNS servers.

"Bot networks aggregate computers that have been compromised allowing them to be remotely directed by the attackers, explains Netcraft, adding:

“Botnets are being used for a variety of scams, including spamming, phishing, sniffing network traffic for unencrypted passwords, and click fraud targeting Google's AdSense program.”"

Full Story: Fraudsters deploy Botnets as DNS Servers to Sustain Phishing Attacks

An attempt to hold search engines accountable for pay per click (PPC) fraud

As billions of advertising dollars flow into searh engine pay per click (PPC) advertising, concerns for fraud activity is taking center stage. Below are a few links to the stories around a group of advertisers who are trying to hold Google, Yahoo!, AOL, Ask, Disney, Lycos, LookSmart, and FindWhat accountable for fraudulent activity through their networks.

"Lane's [Gifts and Collectibles] alleges a conspiracy in which the companies worked with one another to create an online environment that harms advertisers."
-Search Engine Watch Blog

Click Fraud Class Action Lawsuit?

Internet Firms Face Legal Test on Advertising Fees

Internet giants sued over click fraud

Wednesday, May 04, 2005

The need for third party click fraud auditing

"Google auditing itself is about the equivalent of Enron or MCI auditing their own holdings. You can see a definite conflict of interest since PPC is a major revenue backbone/lifeblood for GOOG on the exchange floor."
-SeoMike Search Engine Watch Forums

"If fraudulent clicks are not detected the affected advertisers may experience a reduced return on their investment (and) could lead the advertisers to become dissatisfied with our advertising programs, which could lead to loss of advertisers and revenue."
- Google Quartlery Report for June 2004

Fraud: Obtaining money or property by false pretenses.

Search engine pay per click networks owned by Google and Yahoo! have created an unbelievable revenue stream for themselves, and a huge nightmare.

A secretive nature must exist to protect their search algorithims, which keep them in business and their investors happy, from spammers that would degrade their search results and threaten their business models. It is this same nature, however, not spammers, that is the biggest threat to their new lucrative revenue streams.

The search engines claim that they cant divulge their fraud monitoring practices and methodologies because then the fraudsters would know how they try to monitoring fraudulent activity. Whats even worse, the search engines do not provide, in their client advertising reporting, any information that is identifiable to a particular visitor or group of visits. You have no way of knowing:

  • Who is clicking on your ads?
  • How often are they clicking your ads?
  • What querys are they using?
The search engines keep all of the data for themselves and do not share much of the identifiable and trendable information to you* that would empower you to fully understand and know what is happening with your search engine advertising dollars.

*While server logs capture a good amount of data, it is raw and incapable of providing you adequate trend analysis, dynamic IP tracking and does not provide real time alerting to possible fraud activity as it happens.

Their are two main types of search engine pay per click fraud:

1. A publisher, or third party on the publisher's behalf, clicks on your ads that the publisher runs on their site with the sole purpose to generate revenue for themselves with no chance of a conversion for you.

2. Your competitor, or third party on the competitor's behalf, clicks on your ads with the intent to drive your advertising costs up (cost per acquisition) to the point that you are either driven out or forced to reduce your exposure.

It is estimated that as much as 20% of all search engine pay per click advertising is fraudulent. However, for certain industries, such as retail, it could be as high as 20-50%.

With fraud costing estimated hundreds of millions of dollars and with the search engines not being forthcoming with the data to allow you to monitor your online advertising there is a need for third party search engine pay per click auditing services.

Third party auditing services, such as VeriClix (beta), are rather inexpensive and provide the crucial, real time analysis and alerting that the search engines refuse to provide themselves. These services can monitor all PPC activity in your PPC campaigns and track:

  • All PPC visitors by their IP address, even across multiple dynamic IP addresses
  • The search queries used
  • The ad that was clicked
  • The landing page that was visited
  • The browser type and version (user agent)
  • And the date and time
This real-time reporting empowers you to take full control of your PPC advertising campaigns and provides you with the data to take to your PPC advertising reps and ask for an investigation. The need for third party auditing is as viable as traditional accounting audting firms we see monitoring for publicly traded companies.

Additinal information:
More On Click Fraud, The Lawsuit & The Need For Third Party Auditors

Click Fraud: Problem and Paranoia

Click Fraud In the Spotlight

High Noon for Click Fraud

Sunday, May 01, 2005

Wherever the money goes, fraud isn't far behind

Here are a few links reaffirming the billions of dollars pouring into to pay per click search advertising. Its a forgone conclusion that where the money goes - fraud will follow it. The search advertising pay per click model and newly launched impression ad service by Google are a golden opportunity for protesters.

Advertisers spend billions seeking online customers

2004 Internet Ad Rev Surpasses Dotcom Boom Levels

US Net ad revenues surge by a third to hit $9.6bn

Europe's Online Boom Has Advertisers Rushing To Follow


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