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(rt) With “In ‘Click Fraud,’ Web Outfits Have A Costly Problem” Wall Street Journal staff reporter Kevin J. Delaney presents a disturbing story about an American PPC client advertising on both Google and Yahoo! who fell victim to what was probably a hard hitting competitor’s blatant click fraud activities.

Nathan McKelvey, who runs a web site promoting charter-jet brokerage, grew suspicious when first Yahoo! and next Google sent him unsolicited refunds for “unusual clicks” and “invalid click activity”. Investigating his traffic logs, he detected, so he says, a massive amount of suspicious clicks from IPs belonging to a competitor.

In the course of his investigation McKelvey discovered what SEO / SEM agents have known for years, namely that his specific industry (and so, by inference, the PPC business in general) is “rife with click manipulation”. As a consequence, he cut his PPC budget from $20,000 to a meagre $1,000 a month. (Which, we may add, is arguably still way too much considering the ongoing risks involved.)

Further down the road the article describes another “black hat PPC” practice which could be described as “Adjacking”. This particular strategy focuses on preventing an advertiser’s ad from being clicked on in sufficient volume by displaying them on sites where they will generate no click-thrus. As all AdWords clients know, Google will pull ads that don’t generate a minimum of clicks. This apparently happened to web providers X1Services.com in Philadelphia whose AdWords account was consequently frozen by Google.

Finally, the article features some self-confessed PPC rogues who admittedly clicked their competitors’ budgets to oblivion, blithely tagging it “guerilla warfare” …

While search engines like Google, Yahoo! and Ask Jeeves have to acknowledge the problem in regulatory filings or lose their SEC certification, their everyday track record in actually addressing advertisers’ complaints is, to put it very mildly, an exceedingly poor one. Nor will they let on in any meaningful sense of the term which measures, technical or otherwise, they have in place by way of preventing large scale click fraud in the first place.

Well, we opine that if the martial metaphor cited above is anything to go by, the history of guerilla warfare in general does not bode well for the search engines’ business models. Moreover, their behavior is very much reminiscent of all banks’ attitude towards defrauding hacker attacks in the early days of IT – hush it up wherever possible, fearing it might hurt their reputation. However, today everything seems to indicate that search engines’ persistent refusal of transparency and verifiability regarding their click security setups may well harm their reputation beyond repair.

But how big is this problem really? Huge, extremely huge, even if you should solely lay your trust in the search engine spokespersons’ own public declarations. (Which, of course, is problematic in its own right: chances are that they are actually inclined to downplay the issue for obvious reasons.)

As there is no reliable let alone verifiable empiric data available, it comes as no surprise that estimates vary wildly, with fraud click figures being flaunted ranging from a miniscule 5% to a gigantic 80% (!) of overall PPC traffic, depending on whom you ask and which promoted industry people are referring to in particular. So, at this point in time it’s really anybody’s guess. Still, it’s very much there and demands efficient tackling!

No target group demographics worth mentioning, no security of funds – so what if advertisers across the board should get the message rather sooner than later to better vote with their wallets as Nathan McKelvey did? And about time, too, as many critics (including yours truly) will argue. That could ring in the Golden Age of industrial-strength IP delivery as the only truly reliable and cost-effective approach to search engine optimization and marketing extant …

Read the full article here (may require registration):
→ “In ‘Click Fraud,’ Web Outfits Have A Costly Problem”

If you don’t mind a bit of offensive (well, to some) language, John Smith (if that’s his name) has some noteworthy things to say on this issue here:
→ “Click fraud makes The Wall Street Journal’s front page”

Also, if you haven’t read it yet, you may be interested in this fantomNews article:
↗ Black Hat PPC Management Exposed

And here’s a pointer to something you can actually do about it right away:
↗ fantomTip:
How To Fight Click Fraud Effectively

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