How To Win Against PPC Click Fraud

The recent high profile court case involving Google AdWords and alleged click fraud has filled many online marketers with suspicion. But as an advertiser using Pay-Per-Click search engines there is still plenty you can do to keep your campaigns running successfully.

No pay-per-click advertiser wants to pay for fraudulent clicks. Including me. But I know that no matter how hard the search engines try to detect it, there will always be some level of fraudulent activity, even if it is the owner of a small web site clicking on advertisements on his own site.

So what if a small percentage of clicks are invalid! At least you are still paying mainly for measurable results. Compare this to television or newspaper advertising where you pay by the second or by the inch, regardless of whether anyone sees your advertisement or takes any action after viewing it.

Once you accept that some level of click fraud is to be expected, you can get on with the task of addressing the issue wisely. So how can you be certain you're not going to lose big time and go into the red on your campaigns?

The solution to succeeding despite fraudulent click activity is to manage your advertising campaigns like any other professional in the marketing industry. Here are several aspects of your advertising campaigns you need to stay on top of.

1. Use only reputable PPC search engines.

I recommend advertising mainly with the larger, more reputable search engines such as Google AdWords, Yahoo Search Marketing, and MSN AdCenter. These are the big three as I’m writing this, but depending upon when you are reading this, these may have changed. I have experimented with many other PPC search engines and I have been generally disappointed. Traffic quality tends to be poor and I guess there is less effort at fraud detection. If you want to experiment be sure to run small test campaigns first to check the 'integrity' of the traffic.

2. Monitor your campaigns regularly.

You should check your campaigns every day. I do. And if I am going to be away from the internet for a day or two, I ensure that my daily campaign limits are set at an acceptable risk level. If you are familiar with your usual daily statistics, you will have a greater chance of spotting any spike in activity that may be due to click fraud.

3. Know your conversion ratio.

What is your campaign's conversion ratio? You should know how many click-throughs you need to generate a sale. This might change from month to month and drastic swings may be an indication of click fraud.

4. Calculate your conversion cost.

Multiply your average cost per click by the number of clicks required for a conversion. This calculates your conversion cost.

5. Ensure conversion cost is less than revenue.

Ensure your conversion cost remains less than the revenue you make per conversion. And don't forget to allow for the percentage of orders that cancel.

6. Make changes when necessary.

When a campaign is no longer bringing in a decent profit over and above the costs, make changes. You might reduce your click fees, or change the wording of your advertisement to focus more closely on serious purchasers.

This is not rocket science. It's just good business sense. I hate click fraud and I’ll applaud every time steps are taken to reduce it. But I also know there will always be some level of click fraud. And whether it is 2% or 20% what I am really concerned about is whether I can continue to run my campaigns profitably.

If you stay on top of the vital statistics I mention above, you will be able to win despite click fraud and stay well ahead of the game.