September 27, 2004, 12:00 AM

PPC advertising is big – and so is PPC click fraud

As much as 50% of PPC advertising in some categories may be attributable to click fraud, estimates web analytics firm Clicklab. The problem ranges from affiliates set up just to collect commissions to “impression attacks” that affect rankings on Google.


As PPC online advertising increases, so does click thievery-attempts by fraudulent operators to prey on PPC advertising for their own benefit. Based on the experience of clients over the past two years, as much as 50% of PPC advertising in some very competitive categories may be attributable to click fraud, says Dimitri Eroshenko, CEO of web analytics firm Clicklab.

Theft-by-clicks takes several forms online. Some affiliates set themselves up just to collect commissions on clicks, without adding any real value to the exchange. Competitors constitute a second group of click thieves, says Eroshenko. “By clicking on competitors’ links they accomplish several things at once. It depletes the competitor’s daily budget. Click several times, and the competitor’s link disappears from the bidding competition entirely, so you can then raise your own links higher at less cost,” he says.

At search engine Google, the issue of fraudulent clicks is so high on the radar screen that Google went so far as to identify it in the risks it listed in its recent pre-IPO filing. “At Google, listing priority depends on click-through rates. You can conduct an impression attack by generating an inordinate amount of page views but no clicks,” Eroshenko explains. “According to Goolge’s algorithm, if that happens both your popularity and your ranking will go down.”

Among other enhancements, Clicklab’s recent web analytics release, Version 2.0, beefs up an existing functionality to identify click fraud. A score-based statistical algorithm detects and documents click fraud, applying a series of tests to each visitor session to identify fraudulent session signatures. It then assigns penalty scores to each failed test. An inflation index gives advertisers an indication of the quality of traffic from each source and keyword.

“If you suspect your web site it is the victim of click fraud, your only recourse is to establish appropriate web metrics and conduct a thorough statistical analysis of web traffic originating from each source and keyword,” Eroshenko says.


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