If you’re managing pay-per-click campaigns for your clients, you recognize how pervasive click fraud can be to advertisers. According to the Click Forensics index report,click fraud continues to grow each year. The overall industry average click fraud rate grew to 17% for Q4 2008. And, the average click fraud rate of pay-per-click (PPC) advertisements appearing on search engine content networks was 28.2%.

What exactly is click fraud?

In pay-per-click advertising, click fraud is a crime involving sending fraudulent clicks to a PPC listing. Often clicks are artificially generated using automated technology methods such asbots.

However click fraud can also be done manually — people clicking on PPC ads with the intent to drive up costs to the advertiser.  Click fraud intent could also include raising money for the site hosting the ad. Host sites get paid a portion of the click cost each time someone clicks on the hosted ad.

How do advertisers go about detecting click fraud?

Keeping a close watch on your keyword performance and conversions is important. Sudden increases in total clicks and an abnormal decline in conversion rate could indicate click fraud.

It’s also a good idea to look at your webstats regularly and set up some benchmark reporting to see if there are any indicators of fraud activity. Take a close look at where clicks are coming from — is there an abnormal volume of clicks coming from the same IP address? For another example, if you notice a significant increase in bounce rate from a large number of visitors clicking through your PPC ads and leaving your site in a matter of seconds, this could be an indication of click fraud. Also, look for any trends showing a larger than normal number of clicks coming from countries outside your normal market area.

There are some tools out there to help you detect click fraud including:

• Adwatcher:Offers both ad tracking and click fraud prevention. AdWatcher tracks when your ad has been clicked on five or more times by the same IP address and will show a warning message to the visitor that their IP address has been logged. Offers a free 30 day trial.
• Click Detective:Detailed reports can be provided as evidence for reporting alleged click abuse to a search engine or Internet service provider. Offers free trial as well.
• Click Forensics:Traffic quality management tool will measure and score your traffic quality and prevent click fraud in order to improve your overall campaign performance.
• Clicklab:Monitors for suspicious activity and applies a series of statistical tests to detect fraudulent clicks.  There are over thirty statistical tests used in the scoring algorithm. Website usage statistics for a given PPC traffic source are compared with that of a control group, such as organic search traffic. If cumulative score exceeds the threshold, Clicklab flags a visitor session as potential click fraud (PCF).

Have any other click fraud tools to share? Let us know.

Contact ajohns@gracemediaconsultanting.com