How big of a threat to SEM is click fraud?

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The gloves are off
The gloves are off

CONTENDER
Ashwini Karandikar
VP of client services, Range Online Media
More than 13 years of international and domestic marketing experience

Click fraud is one of maybe 50 things that may impact your campaign and, frankly, it is the most difficult metric for marketers to influence.

Click fraud is an issue that we keep an eye out for. In the past, we have been successful in identifying click fraud and, for two or three campaigns, received reimbursement from Yahoo and Google. But overall, the ability to prove click fraud is unclear. There is no set formula for how to identify it, and we would rather find ways to make a campaign work better.

We monitor our campaigns daily to identify the presence of strange clicks and keep track of trends, and we have a benchmark response rate that we expect. We see how things are perform­ing against that benchmark, but click fraud is only one metric that affects results. To prove click fraud and gather all of that data is a laborious process.

There are some industries that have a higher click fraud rate than others. For our education clients, we see a higher rate of bogus clicks because they have an international audience. For retailers, we are more sensitive to it during the holiday season when traffic is up over­all. I've never had a discussion with a client who cited click fraud as the reason for poor performance. There are so many other factors, such as Flash-heavy sites and page load times, that we look at as well.

There are many third party vendors out there looking at this issue and my response to them is that I am glad they are looking at it, but my clients have goals and budgets. While I'm trying to solve that problem, there are a lot of other things that I can do to improve the performance of a search engine marketing campaign.


CONTENDER
Tom Cuthbert
President, Click Forensics Inc.
Developed search engine monitoring group Click Fraud Network

The pay-per-click model is fairly simple, and companies like Google and Yahoo have built billion-dollar busi­nesses on this simple, effective business of search advertising. This business has transformed the advertising world and provided direct marketers with a promise: folks clicking on your ads are potential buyers. But advertisers have discovered that there is more to it than meets the eye.

This includes click fraud, an ongo­ing problem in the industry wherein clicks are registered for a particular paid ad; however, those clicks originate from a spammer, botnet or some other malicious software. The first problems with PPC advertising emerged when the issue of click fraud made headlines through a series of class-action lawsuits filed by advertisers and then quickly settled by search engines. But the prob­lem of click fraud didn't end there. It was the tip of the iceberg of the larger discussion of click quality.

In 2007, direct marketers and adver­tisers began to more actively employ SEO firms and third-party auditors to measure their traffic quality and ROI for search advertising campaigns. Much to their surprise, they noticed they were being charged for traffic from foreign countries, click farms, botnets and low quality parked domains they never wanted.

Many direct marketers, advertisers and agencies protested. Tools quickly emerged that allowed them to block the traffic they didn't want on their own. Today, direct marketers no longer sit in the back seat when it comes to manag­ing click quality. In fact they have the power to completely control it. And if they're not doing so, they may be leav­ing money on the table.


THE DECISION
Knockout

Click fraud recently resurfaced with the Click Forensics/Yahoo partnership announced earlier this month. While it is certainly a factor in click quality, as Cuthbert terms it, Karandikar's practical approach of constant monitoring and optimizing other factors is the best approach that a search marketer can take to ensure that he or she is receiving accurate metrics — and paying the right price per click.

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