Surprise! Click Fraud giving Marketers the Willies

27 comments
Source Title:
Click Fraud Is Starting to Scare Marketers
Story Text:

The muppets at SEMPO have released details of a survey that confirms the patently obvious; Marketers are afraid of click fraud...

Click fraud is not much of a concern to individual surfers, but it could become a big problem for marketers and advertisers. Some marketers are charging that search engines, the big benefactors of pay-for-click advertising, are not doing enough to protect them against the growing practice of click fraud.

I can just picture Larry Curly and Mo over at GOOG wringing their hands over public opinion on this issue - Potentially, it means: Business model = Poof!

Comments

 

I don't know - mayby I'm missing something on this - clearly click fraud isn't good, but ultimately you know it happens and it comes down to ROI. You advertise in the free press and you know half of them are binned before they're read. You advertise vial leafletting and you know the nasty kids who get paid to deliver they just go burn 75% of them. You advertising in any media and you know that you get a % of timewasters and professional researchers and competitors just checking you out.

This isn't really that different, instead of paying for every impression you're paying for clicks. Right. Well if you pay for impressions online you think there isn't fraud?.

Yes so click fraud is a business and as such means you really do have to be aware of it, but it's still the same equation whatever size the different figures are, is it really worth wetting ourselves over?

And no I don't do huge budget clicks so perhaps I might think differently if I did but then nor do the majority of ppc customers.

There's a huge difference ...

in that click fraud actually invites hard hitting competitors to drain your advertising budget in a whiffy by handing it over to their click bot networks.

To take up your example, it would be comparable to your competitor getting hold of your free press ads and torching the whole issue with you probably never being the wiser.

Any advertising dollar abused that way is an advertising dollar patently wasted: increasing your overhead, minimizing your ROI and possibly even ruining you in the process - all the time lining the pockets of those bastards who should but can't or won't do something about it, read: the PPC engines.

Where's the Incentive for the Search Engines to Stop the FRAUD?!

It's true and it definately happening. We are extremely active in PPC and this is a real
problem - when the clicks start increasing but the conversions don't follow suit, something is up.

Unfortunately it is relatively difficult to catch the fraudsters especially if they have
access to hundreds or thousands of unique IPs.

You can lose a shit load of money - before you even realise whats happening, especially since
things are very variable anyway....

The thing is that the major advertisers can absorb the loss, but if you are a bit smaller
it can really turn things upside down.

We have a site that was doing great with Adwords last month - but recently the number of clicks has gone up massively - the conversions have not followed suit... but how do we prove that its click fraud without lots and lots of analysis (which, of course represents further investment, all be it in time) - then we have to convince the search engine to refund us our money...

The problem is that until click fraud becomes a massive story there is "no incentive" for the search engines to stop it! - why would they! - they get the money! It's probably better for them than it is for the click fraudsters, if and when, it really blows up, then perhaps it will be worth their while to try and combat it...but only if a significant number of advertisers stop spending money and they can see a real dip to their bottom line.

But how?! How exactly can you trace a hardcore dude who wants to go deeper than anonymous proxy servers and employs techniques such as IP tunnelling and trojons. Infact, if you are the little guy and you run low traffic sites with PPC it's really really hard to know what to do... and we've been playing these games for years and we are aware of all the tricks...

Why Stop Click Fraud? One Reason, The Advertiser

How to stop it? It can be done. You must think out of the box and invent technologies that can be expandable and scalable. I think you'll see shortly that this can be done. As a matter of fact you have my word on it.

The reason it needs to be stopped is because the advertiser demands it. Bottom line. Without advertiser there is no pay per click business model. We have to address their needs. I know my company is addressing it either way. I don't care about the rest of the market.

Stopping it cannot be done by fancy algo's that throw up red flags is something is amiss and then require a human to go looking into the problem. That kind of stuff does not work. It's a fallable solution. The real solution must be infallible.

The engines want you to buy into the fact that they have lots of prople and technology to stop this. They do, but it is the fallible kind. They don't have any way to stop it. They, quite bluntly, cannot figure out how to kill it completely, but there are things they are missing.

The solution is coming. Soon.

 

ok - lets start from agreeing that click fraud should be addressed - despite my previous comments I'm not saying we should ignore the problem.

>>The real solution must be infallible.

I absolutely guarantee there is no infallable solution which doesn't also count some valid clicks as click fraud.

There is no infallable solution

Gurtie the internet is nothing more than computers talking to computers. The information to stop it is there if you know what you're looking for.

The "infallable solution" allows for any work around to be caught and killed in minutes. If there is a work around in the first place. "Technologies that can be expandable and scalable" in which I should have included intelligent and adjustable.

Or are you saying that a network will always allow some click fraud through simply because of the revenue involved?

Waiting...

>>As a matter of fact you have my word on it.

Waiting on something that in the entire written history of humankind has never been delivered. An infallible system.

>>The "infallable solution" allows for any work around to be caught and killed in minutes.

Hope it catches bullshit too.

 

>>Or are you saying that a network will always allow some click fraud through simply because of the revenue involved?

no, although that's also a consideration, but not in the way you're meaning I suspect - more related to my last sentence below and retaining ad partner sites.

What I'm saying is that there are always natural circumstances which mimic click fraud. If I click on an ad twice in a minute is that natural or click fraud?

There's no logic which is infallible with regard to click fraud so there's no solution which is infallible. If you start discounting every click you perceive as fraud (ie; not charging for it) then presumably in an adsense scenario you're also going to not pay the advertising sites for those clicks?

What about human interference

such as Third World keyboard monkeys hacking away at ad clicks for a pittance?
After all, if perceived security translates into perceived value and, hence, higher bids, the wage gradient will be easy to leverage with a vengeance.

Ok, so infallable was a bad word to choose... lol

Using the term "infallable" may not have been the right choice of words but what I am trying to say is that the "ideal system" is infallable. How close can you get to making that a reality? Pretty darn close but you are correct in saying NOTHING is infallible. I've seen the error of my verbiage... lol.

Gurtie, there has to be a reasonable time elapsed during clicks before the advertiser can be charged again by the same IP. Getting charged for more than 1 click per IP in 24 hours is overcharging as far as I am concerned. You may get multiple clicks from an IP within minutes but are you sure you are getting charged for each one?

What determines click fraud is whether or not a real user has clicked on a listing. If it's not a real user then the advertiser should not be charged AND the affiliate should not be credited. That is how the PPC system is designed to work. Affiliates should not expect to be paid if their traffic turns out to be garbage.

Third World Clicks Are Filtered

Any engine worth their salt applies geolocation and proxy filtering. With that in place those "monkeys" can click all they like and they are never going to get paid. Let em click. They won't make any $$ at least if an engine is using the right tools to prevent it.

Geo location is no solution

in the time of IP tunneling, ten of thousands of open proxy servers, hundreds of thousands if not millions of hijackable systems etc.

More issues come to mind. AOL, T-Online and many others will assign a different dynamic IP every time a surfer opens a new browser window. New IP - new click enablement.

In your article you mentioned that competitor click fraud (CF) constitutes but a miniscule portion of the overall problem. Fine, let's take this as a given for the time being and focus on affiliate CF, then.

Let's say you have a fairly sophisticated mob type outfit targeting this source of revenue. One possible fraudulent scenario (and there could be lots more):

a) Set up a network of 100 servers spread across the world, assigning 10 C class IP blocks to each.
b) Either write some new program or modify some existing load balancing failover software to daisy wheel CF batch jobs.
c) Focus on medium-to high bids but don't restrict your setup to a single industry (online gambling, adult content, mortgage, etc.) only. Rather, make it a good mix to minimize risks.
d) Generate some 1500 templated publisher sites + accounts (about one per IP), hosted on your servers.
e) Set it up so as to click each keyword ad once per day and IP only.

Targeting clicks in the $10 to $50 range only, what would your revenue amount to? Let's be extremely conservative and say $4-6K per day? Appr. $150K per month? Less costs overhead including some staff, that would probably still leave you with some $120K or so.

Now is that serious money, or what? And if, as an extra anti-detection measure you target top bids so you'll only hit any one of them only twice a week or so? After all, there are enough of them around.

Are you saying you have a halfway fail safe system (no, not infallible) in the works to cover for this?

And again - this is a very basic, downright simplistic scenario. A lot even more nefarious setups are conceivable we probably wouldn't ever want to discuss in public ...

That is serious cash

Geolocation works in the sense that if IP's origionate from a certain locality you don't charge the advertiser for those clicks. On another note my company has real time proxy detection already. If it's being abused it's blocked. "different dynamic IP every time a surfer opens a new browser window" - don't you mean with every new established connection to the internet? Dial up user IP's are per session, not browser window. The only way to pop a new IP in the same session is to enable the browser to accept one - and that - leaves a trail.

Fanto, a lot of it boils down to knowing exactly who your affiliates are. Meeting them in person, investigating their networks, making sure their contact information is real, not fudged and that it matches exactly to their WHOIS info. There's a lot of reasearch done before an affiliate is even brought on board. That alone nixes about 95% of the submissions we get on a dialy basis for requests of a XML feed. Testing then nixes another 4%.

The situation you are describing is of a "phantom network". There isn't a snowballs chance in hell that they won't get found out.

Yes, we are developing a system for click fraud. It is in testing and until the official release all I can say is that we are very confident in our abilities here. We are also working with 3rd parties to independently verify what we have really does work, IF it works. No promises yet, at least, not until our complete testing is done. Speaking from a position of relative certainty I think we're right on track.

But as you will all tell me - the proof is in the pudding - we still gotta deliver before you'll believe!

I also agree there is a lot of stuff that we would not want to discuss in public. There is some pretty nasty stuff going on but there are ways to stop it. Computers talking to computers. The data trail is there. You just have to know what to look for.

agotoguy's blog on click fraud

Missed this to start with on agotoguy's blog which is a very full and well written article on "click fraud"

Agotoguy, by the way, who has several posts in this thread, is Joe Holcomb. Senior Vice President of Marketing, BlowSearch. A hard hitting blog

Quote:
do not think advertisers are speaking loud enough about the click fraud issue. All existing technology to detect fraudulent clicks is severely lacking in functionality.
Quote:
Why aren’t engines directly addressing the click fraud issue? Frankly it is because it will blow up in their face if they do. Google, Yahoo!, FindWhat, and every other provider is simply helpless to stop click fraud. They just don’t know how to. Nor do they want to until they are forced to do so. There is too much revenue involved for them to block all that traffic, or rather, that revenue.
Quote:
They can’t eliminate traffic unless they know where they can replace the lost revenue first. They have financial numbers to hit every quarter.

Joe knows it, you know it, I know it. Sad old commentry on the status quo

Thanks Cornwall

I didn't want to bring that over to threadwatch because I'm not sure if Nick wanted me including that info on the site and from the work he's done here I really respect his content.

Agreed, it is sad. The key thing is that we need to change it. I really believe that we can.

Its going mainstream now

Washington Post is currently carrying an article. When these tech things get out into the main press there is much more pressure on the companies concerned to sort it.

Quote:
Clicking To Steal - When Advertisers Pay by the Look, Fraud Artists See Their Chance

biff

Quote:
"Google is notorious for just flat out ignoring advertisers," Stricchiola said. "Google says, 'Thank you for your inquiry. We see no problem.'

bash

Quote:
"I would characterize the problems due to click fraud as small. We have a software system that filters out fraudulent clicks even before advertisers get billed for them," said Salar Kamangar, a Google product manager.

Pay for conversion

I don't understand the delay in going to a pay for performance model. Just end the PPC. I would imagine the payout for a conversion would be a decent percentage - for those of us selling $250 and up items it could be a financial windfall.

Refunds, chargebacks, kickoffs, agents commissions, etc.

can make pay for conversion models a regular nightmare.

Also, what you'll see then is the PPC engines getting even more restrictive regarding your choice of keywords. And/or over-/underbidding regarding the cut advertisers will be willing to give them.

It's a predicament - for sure,

but don't you see fraud becoming even more rampant in PPC models?

Fundamentally flawed

Because that's what it is, and I've been saying it for years. No matter what tech you invest in, you won't prevent fraud.
That in itself is nothing new or astounding - what's critical here is the level to which it extends. Organized crime isn't going to let go easily of this very cheap to implement source of revenue, and big time, too. So it's definitely not a marginal problem and the sooner advertisers realize it, the better for them.

 

This Salar Kamangar from Google made numerous conflicting statements to the press and if Google dosen't put a noose on this guy he is going to get them in some really hot water.

"This is not a significant problem," Google's Kamangar said. "Google's technology detects invalid clicks, including instances when publishers click on their own ads." He says.

Well like all you guys said to me. The proof is in the pudding. Has Google proven that their technology detects invalid clicks? Obviously not.

Fact is, click fraud is a significant problem. And more than the 20% Jessie from Alchemist Media is talking about all the time.

CPA will not work for search. I've done some pretty intensive research on this and the model, over time, loses an incredible amount of money. Huge losses, not small ones. Those launching CPA based search models today will not be around 2 years from now. However neither will PPC if it does not get it's act together.

Fanto, "No matter what tech you invest in, you won't prevent fraud." I think you know where I stand on statements like that. I flat out think it can. Like I said it's computers talking to computers. Some take human directions and some are scripted to take directions.

Where does this "organized crime" consipracy come from?? Do you have facts to back that up? If so I'd love to see them because after the articles I put out I'd have been "silenced permenantly" by now :)

No conspiracy theory

at work here, neither do I have info "backing it up". It's a mere question of plausibility: if a market's lucrative enough, and PPC certainly is, and can be manipulated, and PPC certainly can, it's only a question of time till the mob moves in. Actually make that "mobs" (plural), because we're dealing with a truly globalized market here, so let's not wax too americo-centric. There's a lot of darn brilliant people out there and they wouldn't have to bump anyone off anywhere to get what they want.

For all we know, it might be happening already - who would be in a position to wisen us up about it?

If media coverage on organized crime and hackers + virus programmers having teamed up for a while now to work the spam trade should prove to be true, guess where it all will be heading? After all, defrauding PPC is a whole lot more lucrative than conning people into paying through their noses to get at bogus Nigerian oil money or arguably even fake Viagra.

Don't get me wrong: I truly appreciate your effort and I'd be the last guy not wish you well and be quite happy to see you succeed in the process.

But I'm afraid I (and I guess I'm not alone on this score) have seen it all before. Not in PPC perhaps, but most everywhere IT is involved. It's an arms race and it's essentially unwinnable. Unless you implement even more police state features than we already have all over the place, it won't work.

And more than the 20% ...

I have tried to get ome decent figures, but really apart from this one of 20% that you mention, nobody has any reliable figures that they are prepared to publish.

You can protect without killing services

You can protect PPC advertisers without killing services, restricting keywords, etc. Long as everything is relevent it's not necessary to make changes to the way advertisers want to display their listings.

It is the responsibility of the engines to tackle this issue and the advertiser should not be burdened by that effort. The user experience is the everything online. Not just for the searcher but also for the advertisers. Giving the advertiser more control - not less - is what this market needs. Why? Frankly, there are a hell of a lot of search marketers out there that know infinitely more than most of the engines do. Let then take advantage of the system so long as it's not abusive. Give them the tools and services they need to be successful and everyone wins. Advertising that is controlled by the advertiser.... now that is a concept long overdue.

20%, from what these eyes have seen, is definitely a low figure. I advertise a number of sites I own in PPC too so I have data on other engines to draw from. As someone who knows how to spot bad traffic (and even I will miss some by eye) I'm drawing from my own personal knowledge here. The figure is really more along 30% to 35% across all engines, 1st tier and middle market alike.

Must be cooperative effort

It is the responsibility of the engines to tackle this issue and the advertiser should not be burdened by that effort.

In order to sell a product with any degree of customer confidence, yes, otherwise the market will die in its infancy. But any advertiser should also take steps to ensure what is promised is delivered.

Marketing on the Internet as a whole is still a very immature industry; it hasn't yet moved to a model where those at opposite ends of the market get together to make sure everybody's interests are protected. Something along the lines of the print industry's Audit Bureau of Circulations, a third-party "non-profit association of advertisers, ad agencies and publishers," would ensure that everybody is working from the same page.

It looks like it's going to be a them-against-them mentality for the foreseeable future. I think everybody should wake up a bit sooner rather than later and realize that a trade goup that represents the entire industry ain't such a bad idea.

(Of course, until then, the publishers or publisher networks with the most reliable measures in place will have a huge leg up among the competition.)

Adsense algorithmic reaction to "click fraud"

For those coming by later, the only google sourced ad on this page at the time of viewing was:

Want to Volunteer?
We'll help you find an opportunity to do whatever you like doing, today!
Public Service Ads by Google

:)

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