How much is PPC Fraud Costing your business?
There has been some debate over the years whether click fraud really exists and how much of an impact it has on PPC marketing budgets. According to click cease, click fraud can on average cost 20% of their marketing budget. To put it simply, that is a lot of fraud! If 1 out of every 5 clicks was fraudulent, the cost starts to stack up. With 20% being a fair approximation, it is critical to understand the common practices of how ad fraud works so that you can minimize your risk and exposure.
PPC fraud is not in fact new and has been around since the early years of PPC advertising. What has changed however is that the technology has grown to become quite sophisticated. In this article we will look at and cover,
- What is PPC Fraud
- How these fraudulent activities work
- How it can affect your marketing budget
- What industries are affected
- What tools and practices you can use to beat click fraud
What is PPC Fraud?
PPC click fraud goes by many names such as ad fraud, click fraud, invalid clicks, or click bot attacks. Other fraud practices can include click spamming, click injection and click spoofing. All these types of ad fraud all have the one common goal – to defraud you of your ad spend so you cannot reach your target audience.
Let us break down some of the ad fraud practices with some simple definitions as all of these terms may appear to be a bit confusing.
This is the overarching name for any fraud that is carried out regarding PPC advertising.
This is the term that Google uses to describe a click taken on a paid link that is not genuine in some way. Invalid clicks can be viewed on a campaign level. Invalid clicks can include accidental clicks and repeated clicks by genuine visitors.
Click fraud refers to when someone clicks on your PPC ads that are not genuine and have malicious intent. Click fraud is usually applied to search-based ads within serp results but can also apply to display ads and shopping ads.
An example of click fraud is when a competitor continually clicks on your paid links with the aim of depleting your budget to push you down in the ad auction process.
Ad fraud is a little different and is usually in relation to banner or video ads that are hosted on a website to capitalize on an Ad Sense payout. For example, someone creates a webpage designed to host multiple ads and they then drive a tonne of fake bot traffic through it. This traffic then collects a payout on clicks and impressions. Unfortunately for you, you end up paying for a lot of irrelevant clicks and impressions and get zero leads or customers.
Click Manipulation – Spamming, Spoofing & URL Injection
These are the new breed of PPC fraud that is found mostly from apps and mobile traffic. These are programs designed to attack sites and applications with generated fake clicks in the hope of collecting a payout or by reducing your ad budget.
How Do These Types of PPC Fraud Work?
There are essentially two ways that an ad account can fall victim to PPC fraud.
- Automated ad interaction by bots and applications
- Human ad interaction
How you will find this kind of fraudulent activity is as follows.
Automated bots are one of the more common forms of PPC fraud in recent years and have become a lot more sophisticated due to advancements in technology. These bots are designed to mimic human behaviour with enhanced AI capabilities. Bots can be built into applications and built across a network, also known as a botnet. They are then operated over different servers known as click farms, with some now hiding behind VPN’s or the Tor network to minimize detection.
It is estimated that around half of internet traffic today is automated by bots and web crawlers. Not all bots and crawlers are malicious, as many platforms and websites use them to collect and gather data. Some examples of bot operated ad fraud networks include Methbot, 3ve and Hyphbot which are all designed to drive bot traffic onto Google Ad campaigns to deplete ad budgets.
Click farm campaigns
Generally deployed from click farms which are designed to generate massive amounts of clicks for various applications. Click farms can be used for social media boosting to budget draining click attacks. They cause repetitive clicks that can really cause some damage to your search ad campaigns. These are older technology and generally do not operate the same as a bot and can usually be blocked successfully via IP address.
Repetitive clicks are a lot simpler and can originate from competitors, disgruntled ex-employees, or previous unhappy customers. Most of the time it is from people who have a grudge who are happy to waste your marketing budget for the sheer fun of it.
It will not happen to my business though, right?
Unfortunately, no industry is safe from click fraud and fraud can affect every type of PPC campaign. It generally is not on a business-by-business basis, but these orchestrated fraud attacks occur on industry specific search terms. Local services generally have fierce local competition, resulting in already high cost per clicks. Because of this fraud can be quite a common occurrence by someone who is a little more tech savvy to try and get the upper hand. Click fraud has been found to be rife in industries such as
- Pet Supplies and Pet Grooming
- Rubbish Removal
- Dental Practices
Ecommerce businesses are also victims of click fraud, even if you are a small business trying to break into the market it can be difficult to avoid click fraud. This is due to bot attacks and click farms attacking websites across industry search-based terms. They do not discriminate whether you are a big or small business. Even if you are just running a small banner ad campaign or a small search campaign.
How much does click fraud cost my business?
That really comes down to how much your marketing budget is, if click fraud is effective then it will deplete your budget and your target audience will not see your advertisements. The financial implication is wasted spending. For example, if you are working with a $30,000 PPC budget, then potentially you could reasonably expect that $4500 is being spent on fraudsters.
If you do happen to get your money back and refunded by Google, it is unfortunately a case of missed opportunity to get more leads, orders and ultimately revenue for your business. PPC Fraud can slow things down and harm the growth of your business.
When you are starting out, many businesses and start ups rely on PPC advertising as it is a way to solidify traffic. SEO can take some time and PPC can help to plug that gap. If PPC campaigns are not protected, then the loss of income can have a knock-on effect within your business.
It is hard to define and put a number loss figure as different companies spend various amounts on PPC ads, with some spending as little as $1000 a month to some spending $250,000 a month or more. If you averaged it out at 15% off those totals, it becomes quite clear why this type of fraud is popular in the digital marketing industry. The stats for Google Ad fraud have been consistent for years without it slowing down. Unfortunately, there are limited restrictions legally as a lot of operations work overseas and have various levels of protection to safeguard identities.
What can I do to stop click fraud?
Google out of the box does attempt to fix fraud with invalid clicks. Using Artificial Intelligence, Google tracks fraudulent clicks from obvious fraudulent sources and Google will automatically blocks and issue a refund. This however does take time. If you happen to spot something within your Google Ad account, you can raise it with Google customer support for investigation, however the claim can take some time to process.
The issue is with identifying clicks as Google treats each visit from each IP address as a unique visitor. For example, if you have a mobile phone device that clicks on your ad in one location, then connects to a WiFi network and clicks the ad again, it will look like a new visitor. If they then log into a VPN, they could click on the ad three times and Google will treat each click as a unique user. These bot programs understand this and change their IP addresses regularly that make it quite difficult for Google’s algorithms to block fraudsters and malicious programs sufficiently.
So, what can you do to stop PPC fraud? There are two methods that you can do to combat click fraud.
You can tweak the settings in your Google Ads interface to limit your exposure to click fraud. These are not 100% guaranteed to work to protect you from click fraud when deployed but may help to cushion the blow.
Location: Target specific areas and regions without going too broad. Also, exclude locations where you think fraud on your advertisements may be happening. This may increase CPM’s so be sure to test and make small changes.
Ad schedule: Do not run your advertisements 24/7. Assess your analytical data and find when the most effective time is to run your PPC ads to limit your chances of exposure to fraud.
Monitor your Analytics: Are you seeing a lot of unique website visitors, but they are bouncing off your site within a few seconds? They are most likely bots and click farm traffic. Monitor your server logs and block suspicious IP address and activity.
Negative keywords: Bot attacks and click farms generally go after very broad search terms. Break your campaigns into more exact match types and utilize negative keywords to filter out irrelevant traffic.
If that sounds hard and a hassle, there is another way. There is click fraud software available on the market that can help to overcome and combat Click Fraud automatically, all with a very easy set up.
Clickcease is one of the most popular click fraud protection software available on the market. It has a range of options such as blocking Virtual Private Networks (VPN’S), bot attacks as well as competitor clicks. It automatically blocks IP addresses on your account and monitors your traffic at a campaign level. The setup is very straightforward and you can get set up and protected within a matter of minutes. Cost is dependent on your traffic needs and there are default profiles already set depending on your industry, though you may want to test these out to ensure they meet your required needs as some can be a bit too restrictive.
Costs: Free 7 day trial, Standard $50 a month, Pro is $75
- Easy to set up
- Gets more performance out of Google Ads Campaigns
- Automatically blocks fraudulent IP addresses
- Default settings can be a little too aggressive for customer journeys. Ensure that you test them out to suit your needs.
- No direct VPN origin detection, the software still requires the click to happen to identify that it originated from a VPN before being able to block it.
Similar to Clickcease, except with more granular reporting. Traffic Guard is an automated click fraud protection software that leverages AI to monitor incoming traffic. Similar to clickcease it also allows you to automatically block IP addresses to a dedicated blacklist.
Costs: Quoted based on volume, customized pricing negotiated with sales.
- Automatically blocks fraudulent IP addresses
- Easy integration with Google Ads platform
- Improve your Google Ads CPA
- Pricing can be quite high when volume of traffic increases
- No agency option if you have a lot of accounts
Real time fraud detection and protection. Each account has a dedicated manager with VIP support to ensure that all campaigns are set up and running correctly.
Costs: Free for 45 days trial, Basic: $39, Standard: $55, Professional: $119
- Dedicated account management for support included
- Automatically blocks fraudulent IP addresses
- Long free trial period
- Top tier is more expensive than other software platforms
Clixtell is a unique fraud tracking and protection software that also utilizes call recording and monitoring. It can also not just block by IP address but also by device ID as an additional layer of protection.
Costs: Free Trial Available, Bespoke Pricing
- Works with both Google Ads and Bing Ads
- Click to call ads tracking and recording available
- Detailed click fraud refund reports for Google and Bing
- Can block by device ID
- Can be a little more difficult to set up compared other software platforms
If you think that you are experiencing click fraud on your Google Ads or Bing account, then there are a number of ways you now know to combat the fraudsters. A lot of these software platforms have free trials available so it’s just a matter of signing up for one and testing it out to see if it meets your needs. Soon you’ll be on your way in protecting your business from fraud and heading towards growth where it matters most. If you have any questions in regards to PPC Fraud or if you think that it might be affecting your account but not 100% sure, feel free to reach out to us and we will do a free account audit. Just click on the free audit button above!