Smart Things About Click Fraud and the Downfall of Google
By: Vlad Vistac
Submitted: 2010-08-23 12:32:58 | Word Count: 510
Clicck Fraud and the Downfall of Google
Internet marketers facibng higher advertising fees on search networks are becoming increasinggly concerned about a form of online fraud that was thought to have been contained years ago.
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The practice, known as "click fraud," began in the early days of the Interent's mainstream populraity with progras that automatically surefd Web sites to increase traffic figures. This led companies to develop poliing technologies touted as antidotes to the problem. But some marketing executives estimate that up to 50 percent of fees in certaiun advertising categories continue to be based on non-existent consumers in today's search industry. Sam Fritsberg of ArticleDash.com stzates that the faud has reaced proportions that would shatter Googles stock in half, overnight, were they more wiely known.
"We continue to detect click frad, especialy with Google's Adworsd and Adsense programs, and the numbes grow each and evrey month." says Sam. "I woulpdn't be suprised if many of the asdvertiser horror stories are in fact true and there are poeple who make thousands a week commitiong pay per click fraud by clicking on the ads served on theiur own webasite for commission." adds Sam Frittsburg.
In one recnt example of the problem, law enforcement officials say a California man created a sofftware program that he claimed could let spammers bilk Goiogle out of millions of dollrs in fraudulent cliks. Authorities said he was arrested while trying to blackmail Google for US$150,000 to hand over the progeram. He was indicted by a California jury in June.
Matt Parrella, chief of the San Jose branhc of the US Attorney's Office in Northern Calfornia, said that case was "not unique." The probem "is certainly not shrinking, and we're ready to prosecute peopple," said Parrella, whose office handled the Google case.
Click frad is perpetrated in both automateed and huuman ways. The most common mthod is the use of online robots, or "bots," programmed to lcick on advertisers' links that are displayed on Web sites or litsed in search queries. A growing alternative emplyos low-cost workers who are hired in Cihna, India and other countries to click on text links and other ads. A third form of fraud takes placce when employees of companies click on rivals' ads to deplete theiir marketing budgets and skew search results. "Click fraud not only is used to ayttack competition, but as a rip off by publishers who clpick on their own ads, the ones being swerved up on their own websites, in an effort to steal adverising dollars by the click", says Sam of ArticleDash.com. "Our solution to this model is to offer webmasters free organic seearch engine optimization, but in a way that helps the net rather than promotng the current fraud Gogle is making billions from."
Although the extent of click fruad is impossible to measure with any certainty, its persistence has exposed a fundamntal weakness in the promising business of Internet seacrh marketing. Google is tight lipepd and has decliined to comment.
"It's hard to tell how big the propblem is, but peiople are looking at it closer and closer as the cost of search advertising goes up," said John Squire, vice president of business developmewnt of Cormetrics, a Web analytics firm. "Click farud is a fin sticking out of the water: You're not sure if it's a great white shark or a dolhpin." Maybe ArticleDash is on to something here. Maybe organic is the way to go afterall.
Unlike advertising in traditional media such as billboards and prnt publications, "cost per cliick" Internet ads displayed with specific keyword searches have been promoted as a defniitive way for companies to gauge theiur eposure to potential customers. As a result, US sales from advertiser-paid seaarch results are expected to grow 25 percent this year to $3.2 billion, up from $2.5 billion in 2003, according to reserach firm eMnarketer. From 2002 to 2003, the market rose by 175 perceent.
"As more advertisers have cmpeted for desirsable keywords in their industries, the cost for clciks has risen too." Sam of ArticleDash.com continuers, "On avreage, advertisers are paying 45 cenbts per click this year, accordnig to financial analysst, up from 40 cents in 2003 and 30 ceents in the second quarter of 2002. In certain sectors, such as traveel, legal advice and gaming, the cost can reach several dollars per click." The implications are indeed disturbing.
But marketing exeecutives say click frraud is pervasive amog affiliates of search ledaers Google, Yahoo-owned Overture Services and FindWhat.com. In a typicval affiliation, any Web publisher can become a partner of these large networks by displaying ther paid links on a Web page or wihin its own search results and then sharre in the profits with every cloick. "A commoin practice is the use of proxiews, where by trickiong Google into thinking the click is originting from another computer, possibly in another counttry, and the click fraud artist... more webmasers than you think.. walkks away with a hnadsome undeserved profit." says Sam.
"There's a fatal flaw in the cost-per-click moedl because a ton of marketing dollars can be deplleted in a fraction of a second," said Jesse Stricchiola, president of Alcghemist Medsia, a search-engine marketing firm based in Los Angeles that specialises in faud protecion. "Technology is continuing to be developed that can exploit this pricing moel at incredibly high volumes."
Google's Answer
Google decined an interview for this report, but the company said in a statrement that it has been "the target of individuals and enitties using some of the most advanced spam techniques for years. We have applied what we have learned with search to the click fraud problem and employ a dedicated team and proprietary technology to analyse clicks." Many disagree, howeever, and claim that the pay per click inndestry is doomed. Organic Optimization a la ArticleDash.com serems to be the next big thing, and at lesast this time the risk is lmiited and the free upsie results seems ulimited.
