You wouldn’t be happy paying thousands of dollars for a Rembrandt original or a Gucci handbag that turned out to be a counterfeit or an off-the-street knockoff. In fact, you’d be furious at having paid full price for fake goods.

So why don’t you take action when a good percentage of the online marketing traffic that you paid for turned out to be wasted? Why would you still allow Click Fraud to go on unchecked right under your nose?

Read on to find out about what exactly Click Fraud is, how its threatening to sink your marketing campaigns and how tracking your exact marketing ROI can help mitigate the impact of Click Fraud on your marketing efforts.

What is Click Fraud?

Click Fraud describes a type of fraudulent behavior centered around pay-per-click online advertising, such as Google Adwords, AdRoll and Outbrain. Someone, using an automated script or botnet computer program, pretends to be a real web surfer who is interested in your ad, and subsequently clicks on it.

The problem, of course, is that this click doesn’t actually represent real interest in whatever you’re advertising, but the cost to the marketer is indeed very real. Since digital marketing programs operate via pay-per-click – i.e. they pay for each click on their ad – this can drive up the marketer’s cost per action and overall ad spend significantly.

If you think this doesn’t sound serious – after all how much damage could a handful of “fake” clicks cost? – these statistics might give you pause and make you reconsider:

  • The Wall-Street Journal reports that 36% of web traffic is fake, spawned by these Click Fraud programs and bots
  • In 2006, Google agreed to a $90 million settlement in a click fraud class-action lawsuit. Later that same year, Yahoo settled in a similar lawsuit filed by Checkmate Strategic Group. Since then, litigation around click fraud has been extremely rare, due to various legal complications around the issue.
  • Click fraud will cost the global digital display advertising industry approximately $11.6 billion in 2014.

If those numbers are as scary to you as they are to us, why is Click Fraud still so pervasive? Why has it been so difficult to stop? For several reasons:

  • It’s not a federal crime. As we mentioned above, there have been very few litigation cases against click fraud since 2006.
  • It’s extremely difficult to track. The programmers behind these botnet programs are a lot more sophisticated than most marketers. Tracking actual occurrences of click fraud requires complicated analysis of date and time patterns, IP patterns, and other back-end data that most marketers wouldn’t know the first thing about.
  • Advertisers and marketers don’t mind these clicks! The advertising networks are making money, so it’s in their best interest to continue doing or supporting this. Meanwhile, many marketers are judged on their ability to drive traffic and bring people to their site, many of whom might come through such paid ads. If their traffic numbers are goosed, it actually makes them look better, like they’re doing their jobs well.

Where Marketing Analytics can Help

Many marketing teams will spend lots of money on paid advertising without any real visibility into what they’re producing from their dollars. With unsophisticated tracking techniques, they can’t even attribute which marketing campaigns and sources are generating the most leads, to say nothing of the ROI of each of these campaigns. If you’re waiting for the ad networks to take action, you’re going to be waiting for a while. It’s on you to watch out for click fraud for yourself.

What marketers need to combat click fraud is sophisticated marketing analytics that rely on performance-based metrics. More specifically, marketers need to dive into the metrics on their paid campaigns and reconcile that data with the number of clicks and the amount of spend on each of their Adwords or other paid advertising campaigns. If the ROI isn’t there, that’s likely due to the fact that most of your Adwords spend is a result of click-happy bots or scripts.

If your paid campaigns are ultimately generating very few leads, opportunities or deals, it might be time to turn to refine and re-optimize those campaigns. If even after some rejiggering you don’t see any improvements – i.e. click fraud is still ratcheting your paid spend far beyond the returns you’re getting – it might be time to shut that off and turn to another well.

Marketers also need to put more pressure on online advertisers and publishers to be more stringent in combating this plague. One example would be to define click fraud as more than five clicks from a unique user within a small time window, thus encouraging publishers to disincentivize click fraud in the first place.

Click fraud is likely here to stay for the long haul, but there are things marketers can do to prevent it from hurting them – and their budgets. It all starts by having much more visibility into what your team is doing and the ROI of your paid campaigns. Become more sophisticated and don’t let click fraud ruin your great marketing efforts.

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