Holiday Pay Per Click Fraud on Ad Clicks? What Are the Facts?

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While the holiday season takes shape, Pay Per Click will no doubt play a major role for much of the online sales generated, but at what cost to the advertiser? Pay Per Click fraud is expected to be bigger than ever this holiday season.

While the holiday season takes shape, Pay Per Click will no doubt play a major role for much of the online sales generated, but at what cost to the advertiser? Pay Per Click fraud is expected to be bigger than ever this holiday season.

While the holiday season takes shape, Pay Per Click will no doubt play a major role for much of the online sales generated, but at what cost to the advertiser? How many of the clicks are even real? The consensus seems to be around 50% according to most of the rising anti-fraud companies stepping into the fray to advise their clients. That means that, while the click value may very well be accurately assigned by the market, the other half or more of the clicks this holiday season will be outright phony, which will cost advertisers big time, especially mom and pops who might be caught off guard.

A small article on an SEO website (http://www.seochat.com/c/a/Search-Engine-News/PayPerClick-Destined-to-Evolve-into-PayPerAction/) takes the credit for the title “Pay Per Click Destined to Evolve Into Pay Per Action?” , but not necessarily the idea. Froogle is an eBay skip away as it is, but it doesn’t’ go the whole nine yards. Local Pay Per Call and other options have been around for some time now. We’re all just waiting for something serious to pull PPC down before we will be able to get behind a new medium, it would seem.

Most Internet Yellow Pages are flat, static, and interactively stale. U.S. advertising in Yellow Pages equaled $15 billion last year according to Kelsey Group. One out of four Internet searches is for local information. Searches for local information are likely to increase by around 33% a year, while use of the printed Yellow Pages dwindles by 4% annually, according to Kelsey. With billions of dollars of local advertising at stake, everyone's stepping up to address and tackle the local search challenge.

Traditional search engines and web directories use automated information retrieval systems to display content relevant to a user's search request. Eliminating the many difficulties and problems that are encountered and arise from the various automated tools that try to properly interpret unstructured user queries is also a challenge, leaving us to wonder how engines heavily invested in PPC and non-local approaches will fare on tomorrow’s local-focused Internet, especially as PPC behemoth Google is now fighting off litigants in court in class action suits revolving around click fraud as this is being written.

So what, if any, are the real detractions of Pay Per Action? Well, users may just have to reveal their identity as opposed to anonymous PPC, but most likely on secure servers which is no different than the part where you fill out the order form with your address and credit card information. If you’re comfortable with your favorite merchant or product carrier knowing your personal information, then there really is no problem for the consumer there. How about on the advertiser end? The only likely problem is if Pay Per Action advertisers fail to understand the medium, which requires up front information about the user. Ultimately, credit cards, as already done in many situations, confirms one’s identity quickly and accurately enough for most of us in today’s society, and poses little problems for even the guy who buys survival equipment from his camouflage lined computer chair.

One dot com pundit (http://www.imediaconnection.com/content/4663.asp) has noted a key factor being the distribution of broadband connection to the Internet, providing “always on and always connected” access to the Internet in every home that formerly would have pulled out the worn phone book to contact a local business. This is a notable factor, as connecting at cost each time is a detraction for homes not yet plugged in 24-7. This isn’t a flaw in local search, per se, but just a small delay that will probably diminish rather quickly in the next 5 years or less, according to Jupiter Media (http://www.jupitermedia.com/corporate/releases/05.08.23-newjupresearch.html), who states that broadband will likely include 80% of all Internet users by the year 2010. With 43% already getting online via broadband [Jupiter], it would seem that the end of PPC is nearing indeed, and with it, click fraud.

Imagine a holiday season not that far away, maybe even December 2006, when the majority of clicking doesn’t automatically spend the marketing budget of the advertiser until the purchase is made. The PPC guys will lose their corner on online advertising, but the consumer and businesses will both profit when neither is forced to pay extra for the Pay Per Click’s darker side. Then clickmen will have to go back to less relaxed methods of robbing and stealing during the holidays, and simply drop the TV set when the sirens start to sound, or else get legitimate jobs, instead of fueling a rogue corporation’s offshore antics.

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Luis Pereira