The holiday season is upon us. Shoppers are spreading their cheer, and marketers are hard at work trying to capture those cheerful dollars. According to eMarketer and the National Retail Federation, holiday sales will increase by only 2.2 percent this year, while online holiday sales are expected to grow by 10.1 percent. In other words, online holiday sales are expected to grow at least four times faster than holiday sales as a whole, despite the challenging market conditions.
As online sales grow, so too will online fraud. According to a survey by 41st Parameter, 84 percent of ecommerce fraud and risk management experts believe that online fraud will increase this holiday season. While online fraud crimes such as identity theft, gift card scams and click fraud constitute a year-round nuisance for online retailers, industry experts caution that offenders tend to step up their activities during the busy holiday season. Interestingly, 67 percent of survey respondents are particularly concerned about increased fraud ring activity and botnets, two significant contributors to click fraud. With the increase in online, performance-based advertising this month, click fraudsters are very likely to take advantage of the influx of cost-per-click (CPC) dollars.
Fortunately, there are several rules of thumb that advertisers can use to help recognize and identify instances of click fraud. Here are 10 tips for nipping these holiday scrooges in the bud:
1. Watch for significant variations in campaign performance
Look at your reports to identify sudden peaks and other anomalies in your daily traffic and costs. If you cannot determine the cause and the peaks are not associated with corresponding lifts in performance, consider stopping your campaign and/or asking your network to investigate further.
2. Prevent competitive click fraud
Do a few searches on your keywords to compile a list of relevant competitors. Then open your Command Prompt on your PC (or Terminal on your Mac) and ping each competitor's domain (e.g. type "ping www.CompetitorDomainName.com") to ascertain their company IP addresses. You can find their entire range of IPs by using services such as ARIN.net. Be sure to check that the IPs are registered to the company directly, as opposed the company's hosting provider. If they are, add those IPs to your account IP exclusion lists (when available).
3. Don't drain your own budget
If you're concerned about clicks coming from your own employees, add your company's IPs to your account IP exclusion lists (when available).
4. Block poorly performing referrers
Assuming your analytics package provides referral and conversion information, start with your highest-volume referrers and determine which sites fail to drive any conversions. If you notice that your ads/keywords are performing poorly on particular sites, reduce your bids for those publishers/channels. For high-volume sites that generate zero conversions, selectively use the domain/channel-blocking feature to prevent your ads from appearing on those sites in the future.
5. Monitor high-dollar CPC terms closely
Keywords with high CPCs are more likely to be hit with click fraud than those with low CPCs. So pay particular attention to these keywords and the referrers that generate disproportionately more traffic to your site through these keywords. Determine whether or not you're seeing a positive ROI on your bids. If not, consider lowering your bids on poorly performing keywords/ads and allocating more spend to higher-performing keywords/ads.
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