Click fraud, or unwanted clicks, are clicks on your ads that are done
deliberately by your competitors or someone that wants to harm your
AdWords campaign performance and therefore also your business.
While there are many ways that click fraud can be performed,
there are three major types of click fraud…
If you are using Google AdWords, you already know how important it is to optymize your campaigns and maximize your ROI. There are many different strategies and great tools to accomplish this within Google AdWords platform. However, there is one large, missing piece of the puzzle, not all the clicks that you are paying for are coming from wanted users!
You may have real experiences with click fraud, like realizing that someone is deliberately clicking on your ads in scale. Or you may just be managing your campaigns with uncertainty, not knowing that you may have paid for clicks that have ZERO probability of bringing you any business.
Manual Click Fraud
Some person is continually clicking on your ads from his/her computer, tablet or smartphone.
Click Fraud by Robots
Unfortunately, there are many available tools (robots) that people use to perform click fraud.
This mostly happens due to inexperienced users, but could also happen from annoying ads on apps.
Our algorithm monitors your traffic live and responds to potential threats as they occur with the AdWords API. Instead of just sending you an email notification about the threats, our system automatically excludes the perpetrating IP addresses from your AdWords account.
Our system continually performs cross account analysis to identify problematic IP addresses that could potentially threaten your account as well. Once a click fraud performing IP address has been identified within multiple accounts, it is then marked as blacklisted. A blacklisted IP address is added to the blocked IP list for all of the accounts that our system monitors, saving these accounts from potential click fraud activity.
Google AdWords limits the IP exclusion list to 500 IP addresses, so our system in our click fraud detection tool has a built in prioritization algorithm for situations where threatening IP address exceed the allotted 500. In addition to taking into consideration the date of violation, our system automatically places a threat-level grade on each offending IP address. This way you always know that the top 500 most threatening IP addresses are in your blocked list.
How the fraud effects you!
It Takes You “Out of the Game” Early, Changes Your Return On Investment, Create Uncertainty & Biased Observations.
errorTake You “Out of the Game” Early
With click fraud, even if you get your money back, you may still run out of budget for that day. It lowers your expected performance. You may lose potential sales that did not have the chance to come in (they did not see your ad). Back to our previous example: Assuming you pay $10 per click and and sell product with $100 profit and have $100 daily ad budget…
- Without click fraud – You get 5 authentic clicks and one of them was a buyer. You have a cost of $50 that generates $100 profit. In that same day, you had another 5 clicks and one of them was a buyer. Your profit goes up to $200 total for that day.
- With click fraud – You get the same 5 clicks (with one sale) + 3 click frauds (zero probability for sales). Due to your daily budget, you get only another 2 authentic clicks which are not enough to generate a second sale. Now, your total daily profit only $100 generated from the first 5 clicks.
How can you expect to become a great baseball player if you are always sitting on the bench? How can your ads provide you the most “bang for your buck” if your budget runs out due to abusive clicks?
When your AdWords account is plagued by fraudulent clicks, it can make your decision making tasks much more difficult. In your ad campaign creation and optymization, you have many decisions to make.
- Who am I targeting with this ad campaign?
- Is is worth it for me to put up the extra money to be on the first page of the search results?
- What keywords should I focus on?
- What should my daily budget be?
These decisions will be easier to make, if you know that each click your ads receive is a legitimate click. You will be better informed and not basing your decisions on inaccurate data that is skewed by click fraud
errorChange Your Return On Investment
Fraudulent clicks on your ads makes your advertising cost higher and therefore lowers the return on your investment (ROI). Over time this can represent a significant problem that can and should be avoided. Here we present a simple example: Let’s assume you pay $10 per click and and the product you sell has a $100 profit.
- Without click fraud – You get 5 authentic clicks on an ad and one of them became a buyer. Your ad cost of $50 generated $100 profit.
- Your return is ($100/$50) = 100% ROI
- With click fraud – You get the same 5 authentic clicks (with one buyer) + 3 fraudulent clicks (zero probability for sales). Your ad cost then comes to $80 which generated $100.
- Your return is ($100/$80) = 25% ROI.
Your goal is to get the best ROI possible. With click frauds your ROI goes down unnecessarily. Preventing click fraud is the first and most important step in getting the best return on your investment in AdWords.
errorCreate Biased Observations
As an account manager, it can be difficult for you to analyze some of the performance factors of your ads, such as:
- Click-Through-Rate (CTR) – CTR may be higher due to click fraud abuse.
- Cost Per Conversions (CPC) – When there is click abuse, CPC may be reported higher than it is in reality.
- Misinformation on Sectioning – Some sectioning, such as geographic areas, may look like they are doing better than others due to an excessive amount of fraudulent clicks from an IP address in that area.
- General Ad Performance – Some keywords and ads may seem to have exceptional performance in terms of number of clicks. This may cause you to increase their budget, but their reported performance may only be due to undesirable click abuse.