Internet marketers are getting more worried about a type of online fraud that was thought to have been stopped years ago. This is because search networks are charging more for ads.
"Click fraud" started in the early days of the Internet's widespread use, when programmes automatically visited Web sites to boost their traffic numbers. Because of this, companies made policing technologies that they said would solve the problem. But some marketing executives think that up to 50 percent of fees in certain types of advertising are still based on people who don't exist in the search industry today. Sam Fritsberg of ArticleDash.com says that the fraud is so bad that if more people knew about it, it would cut Google's stock in half overnight.
Sam says, "We are still finding click fraud, especially with Google's Adwords and Adsense programmes, and the number of cases is growing every month." Sam Fritsburg says, "I wouldn't be surprised if many of the advertiser horror stories are true and there are people who commit pay-per-click fraud by clicking on the ads on their own website for commission and make thousands of dollars a week doing it."
In one recent example of this problem, police say a man from California made software that spammers could use to trick Google out of millions of dollars by clicking on fake ads. Authorities said that he was arrested because he was trying to force Google to give up the programme in exchange for US$150,000. In June, he was charged by a jury in California.
The head of the US Attorney's Office in San Jose, California, Matt Parrella, said that case was "not unique.
"The problem isn't going away, and we're ready to bring people to court, "Parrella, whose office worked on the Google case, said this.
Click fraud can be done both by machines and by people. The most common way is to use online robots, also called "bots," that are programmed to click on advertisers' links that are shown on websites or come up in search results. Low-cost workers in China, India, and other places are hired to click on text links and other ads. This is becoming a more popular alternative. A third type of fraud is when employees of one company click on the ads of a competitor to use up their marketing budgets and change search results. Sam of ArticleDash.com says, "Click fraud is not only used to hurt the competition, but also by publishers who click on their own ads on their own websites to steal advertising dollars by the click." "Our solution to this model is to give webmasters free organic search engine optimization, but in a way that helps the Internet rather than promoting the current scam that Google is making billions of dollars from."
Even though it's impossible to know how big a problem click fraud is, the fact that it keeps happening shows that Internet search marketing has a serious flaw. Google is keeping its mouth shut and hasn't said anything about it.
"It's hard to tell how big the problem is, but as the cost of search advertising goes up, people are looking at it more and more," said John Squire, vice president of business development at Web analytics company Coremetrics. "Click fraud is like a fin sticking out of the water. You don't know if it's from a great white shark or a dolphin." ArticleDash might be on to something. Maybe organic is still the best way to go.
Unlike traditional forms of advertising like billboards and newspapers, "cost per click" Internet ads that show up when a specific keyword is searched for have been pushed as the best way for companies to measure how many potential customers see their ads. According to the research firm eMarketer, this will cause sales from advertiser-paid search results in the US to grow by 25% to $3.2 billion this year, up from $2.5 billion in 2003. The market went up by 175% between 2002 and 2003.
"The cost of clicks has gone up as more advertisers have tried to get good keywords in their industries." Sam from ArticleDash.com keeps going, "Financial analysts say that advertisers are paying an average of 45 cents per click this year, up from 40 cents in 2003 and 30 cents in the second quarter of 2002. In some fields, like travel, legal advice, and gaming, a click can cost as much as a few dollars." The implications are, in fact, very scary.
But people in charge of marketing say that affiliates of search leaders like Google, Yahoo's Overture Services, and FindWhat.com are very likely to commit click fraud. In a typical partnership, any Web publisher can become a part of one of these big networks by putting their paid links on a Web page or in its own search results and then splitting the money made when someone clicks on those links. Sam says, "It's common to use proxies, which trick Google into thinking the click came from another computer, possibly in a different country. The click fraud artist, which is more common than you think among webmasters, then walks away with a nice profit that he or she doesn't deserve."
"The cost-per-click model has a fatal flaw in that a tonne of marketing dollars can be spent in a fraction of a second," said Jessie Stricchiola, president of Alchemist Media, a Los Angeles-based search-engine marketing company that specialises in protecting against fraud. "Technology is still being made that can take advantage of this pricing model at very large scales."
Google's Answer
Google did not agree to an interview for this report, but the company said in a statement that it has been "people and businesses who used some of the most advanced spamming techniques for years. We've taken what we've learned about search and applied it to the problem of click fraud. We use a dedicated team and our own technology to analyse clicks." But many disagree and say that the pay-per-click industry is going to fail. Organic Optimization like ArticleDash.com seems to be the next big thing, and at least this time the risk is limited and the free results seem to be limitless.
