The creative director for Kinetics Results reports on a recent Marketing Experiments webinar.

Whenever anyone tries to tell me, "Man is inherently good," I sigh. People like to believe that, and I understand why, but I just can't buy into that philosophy. Yes, we rally when people need help and we give of our time and money when disasters strike, but it seems like everywhere you look, people are trying to make a dishonest buck. Maybe SOME people are good, but others are criminals-- and they just can't help themselves. Take the practice of click fraud, for instance.

Much talked about of late in interactive marketing circles and much ignored by many at the major search engines, click fraud really does exist in a variety of forms.

For the newbie, pay-per-click advertising, or PPC (on Google, those are the results in the right column and at the top, highlighted in blue) is just what it sounds like; the placer of the ad pays only when someone clicks on their ad. This is all fine and good, provided the people clicking on the ads are legitimate prospects actually looking for what you are advertising, or that they are even people at all.

In its simplest form, picture this: Your evil, criminally minded competitor over at Acme Widgets absolutely HATES that you are beating him in the search results, your ads always above his. He knows you have to pay whenever someone clicks on your ads, and he knows you likely have a limited budget for your PPC. So, inherently bad person that he is, he just starts clicking away on your ads, driving your PPC budget into the dirt and removing you from the search engine results pages once you've been bled dry. Or maybe he's smarter than that and he knows you'll find him out, so perhaps he finds some click houses in India, Egypt or China who will do the dirty work for him for a nominal fee.

It gets more sophisticated, with bots doing the clicking, even making it look like they were surfing your site and going to checkout, only suddenly abandoning their cart at the last minute. You lose the money for the fake click-- and perhaps an affiliate of yours who had a paid ad on his site is profiting as well, which leads us into all sorts of double-crossing intrigue possibilities.

The click fraud debate has almost mirrored the global warming debate, with some saying it doesn't exist at all while others make exaggerated claims as to its reach and scope. In a recent webinar sponsored by Marketing Experiments, the question of "What can a marketer do about click fraud?" was the main topic.

An independent study conducted by Marketing Experiments found that as much as 30 percent of PPC clicks are fraudulent. So, the "does it really exist?" question was quickly dispensed with, with our host from Marketing Experiments intimating that perhaps this study had some bearing on Google's recent class action click fraud settlement to the tune of $90M.

So, once you admit that all people aren't inherently good, how do you go about catching them?

First of all, you have to monitor. And then monitor. And while you're at it, monitor some more. So 1,000 clicks came from one of the major technology centers in India yesterday between the hours of nine and five, India time? You might want to look into that, especially if you don't often have sales in India. Now, take those stats to your friendly search engine representative and prove your case.

In the case study given on the webinar, a rep from a major search engine, which shall go nameless, (rhymes with "frugal") agreed that the figures and their associated IPs looked suspicious, promising to get back with the client. They did as promised, but concluded no foul play and no foul pay had occurred. And why, really, is a major search engine going to fend for you when they already have your money? Are search engines inherently good? That's a debate for another time. But the more information you have, the easier it may be to prove your point that you've been robbed, but don't count on it. Get a hold of a very good web analytics program, or better yet, some click fraud detection software. But more than that, the argument went, you need to be proactive.

A few of the better proactive things you can do, as pointed out at Marketing Experiments webinar:

• Be very conservative with content-targeted ads placed on third-party websites. This is where the majority of international fraud takes place.
  
  
• If fraudulent or unproductive activity occurs primarily during a certain time of the day, then pause the campaigns for those hours.
  
  
• Don't buy PPC traffic on unknown search engines. These will often allow bots and other suspicious activity in without a high level of click fraud filtering.
  
  
• In addition to monitoring paid conversions, you should also monitor your organic conversion rates. A sudden deviation in the ratio between these two conversion rates may indicate click fraud.
  
  
• High-traffic, expensive keywords are the most obvious targets for those involved in creating fraudulent clicks. Make their job harder by leveraging keywords that aren't so inflated.

Additional resources: 
View Marketing Experiments webinar notes here.

Read Click Fraud: The Ugly Underside of SEM