Pay-Per-Click Advertising & Click Fraud

`You have most likely came across Pay-Per-Click ads today when you searched something on Google without even realizing that they were ads.  When I typed in “Christmas Presents” into Google, I had distinctive websites come up at the right of the page and the top of the page that were faintly labelled, “sponsored links”. Hence the name, the advertisers only pay if a web user clicks on their ad.   Since these advertisers pay every time their ads are clicked on, people can click on their ads with no intended interest of the site, just to make money off of it (from the publishers point), or charge the advertiser unfair charges (from the competitors point).  This type of Internet crime is called Click Fraud, and people have been arrested for it.  One thing that I discovered while playing around with Google Adwordsand going through the steps in creating my own pay-per-click advertisement, is that you can put a ceiling price on your ad.  This lets you chose how much you want to pay for your pay-per-click ad per day, and if and when your daily total is reached, you will not be charged anymore.  However, your advertisement will then be removed for the rest of the day, and may result in loss of sales.  This is beneficial for companies who want to stay within their marketing budget, and also reduce the risk of click fraud. 

In the past, Google was sued over a click fraud issue,  “In February 2005, Google, Yahoo, and Time Warner. were sued by Lane’s Gifts & Collectibles in a class-action lawsuit over click fraud. The company alleged that Google and the other companies had been improperly billing for pay-per-click ads that were not viewed by legitimate potential customers. .”  How Google Manages Click Fraud.  In response to this lawsuit, Google addressed their click fraud prevention systems, “Google has built the following four ‘lines of defense’ for detecting invalid clicks: pre-filtering, online filtering, automated offline detection and manual offline detection, in that order. “How Google Manages Click Fraud.  However, even with these tools, Google, and other search engines, have continued to be sued and blamed for click fraud.   Google soon after announced that it will show advertisers the number of invalid clicks on their ads.  This will show advertisers how much Googles tools are helping their site from preventing click fraud, and may be less likely to blame Google next time they get a large bill in the mail from click ads.  According to Itviewpoint.com Google now has a less than 2% click fraud rate, due to their 4 layers of click fraud filtering.

Googles 4 layers of Click Fraud Prevention