April 19, 2017 by Jason Pittock | 4 min reading time

PPC Advertising vs Click Fraud

click fraud and machine learning have become part of PPC Advertising
Click fraud and machine learning have become part of PPC Advertising. Terrible but true... The Industry is plagued, and people simply don't know.


Pay-per-click ads invaded all online platforms that are out there. For a long time, digital advertisers believed that PPC advertising can work miracles. PPC advertising is one of those rare strategies that are both targeted and flexible

PPC Advertising is supposed to be very quantifiable, that's until you get click fraud...

#MAKEEVERYCLICKCOUNT

On top of that, in the long run, it's not as expensive as TV, for instance. According to a study conducted in 2016, advertisers spent $72.09 billion on U.S. PPC advertising, and  $71.29 billion on TV. These numbers clearly show that marketers chase after digital advertising since it has more to offer.

One of the major reasons why advertisers choose PPC advertising is to promote their products is because they can evaluate its performance. The number of clicks and how much traffic it drives are available for advertisers. That access to results allows them to reveal the validity of the clicks and detect any fraudulent activities.

Click Fraud Will Make Up a Good Percentage of Your Audience

As Ron Amram, a brand marketing specialists, puts it, digital advertisers “pay for the eyeball” but instead they get false clicks. Along with his colleagues, Amram found out that every $1 ad spend result in $2 revenue, which is a relatively small number. PPC Advertising has been at the top of advertisers game plan for any project or endeavour.

The problem - is the total lack of transparency...

For a billion-dollar industry, this is a huge issue. That is why the Association of National Advertisers initiated research to find the roots of the problem and come up with practical solutions. After numerous case studies and data analysis, here is what they discovered:

  • 11% of display ads were viewed by software
  • 25% of video ads were viewed by software

A break down of PPC Advertising and its relation to click fraud shows the sectors of the PPC Advertising industry that being most being targetted:

Break down of click fraud as a pie chart in the PPC Advertising industry

Or in financial terms, fake traffic costs $7 billion dollars. PPC Advertising will continuously pay for the clicks only to find out that conversion rates and traffic show only slight changes and frustrate progress.

Furthermore, click fraud has become some sort of business among hackers. Malware that generates the false clicks is later sold to another person who can perform click frauds of his own. This ends up making getting to the bottom of the problem harder for click fraud detection specialists.

How to Solve This Monstrous Problem

Some specialists like Bob Hoffman, the author of the blog the Ad Contrarian (PPC Advertising specialists), think that nothing has damaged the Internet and its safety more than online ads. Click fraud harms the reputation of the web and prevents relatively safer activities. So, their solution is to ban online ads: no ads, no clicks, as simple as it is.

Another portion of online advertisers and cybersecurity specialists claim that it is hard to distinguish genuine clicks from false ones. That is why the statistics can be wrong sometimes. Although this chamber of specialists can’t deny the recent ineffectiveness of PPC Advertising and the irrational correlation between clicks and conversion rates.

Is PPC Advertising at Risk Because of Click Fraud?

Click fraud does occur and it is a huge problem. Enterprises, both big and small, can’t keep spending money on PPC ads and get ridiculously low ROIs. Completely removing the concept of online ads is not the best solution.

Alternatively, through ad monitoring click fraud protection software like ClickGUARD, results-driven PPC Advertising specialists can keep an eye on the clicks of ads and their validity. The sooner you detect the matter, the faster you can resolve it.

Jason is the CMO @ ClickGUARD. He is passionate about all things PPC, SEO and has extensive customer acquisition experience. When not writing about SEM he can be found surfing the wildest ocean waves of the South American coast.