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Pay-Per-Click Fraud on Google and Yahoo???

BarbRBarbR subscriber Posts: 5
edited January 2007 in Marketing
I recently read in Crain`s Detroit Business that click fraud is on the rise.  Both Google AdWords and Yahoo Search Marketing have small business clients that are experiencing this type of fraud.  The article states, that, "Click fraud happens when a third party, directly or indirectly, repeatedly clicks on a sponsored link with no intension of using that advertiser`s goods or services. It`s done for a variety of reasons, from competitors looking to maliciously siphon ad dollars to third parties that make money by exploiting aspects of the pay-per-click advertising concept."   Although this type of marketing has proven successful for many small businesses, this type of fraud can ruin a small business if not monitored closely.  For instance, the article mentioned a small business in Michigan that expected to pay Yahoo a maximum of $10 a week for their click campaign, and was blindsided with an $8,500 charge in a seven day period.  Looking back at the campaign, they noticed a stretch which billed them at the rate of $100 every three minutes!  Very scary!
As a small business, are you a supporter of pay-per-click advertising like Google AdWords and Yahoo Search Marketing?  If so, have you ever encountered this type of fraud?  How closely do you monitor these types of campaigns? 


  • MNGrillGuyMNGrillGuy subscriber Posts: 2 Member
    I think you`d need a very good ratio of buyers/visitors for such a campaign to work.  The question becomes how much are you willing to pay for one customer??  $1, $2,..$10? 
  • ChuckChuck subscriber Posts: 6
    There are ways to protect yourself - specifically in the case mentioned, the advertiser must not have been aware that they could set a budget limit. If they had specified a budget of $10 per day, the most they could have been charged was $12, and then their ads would no longer be shown.Still leaves the problem of fraudulent clicks, whether it`s $10 or $10,000 - and it`s something Google, Yahoo and other providers must tackle if their revenue model is to remain viable.
  • PokermanPokerman subscriber Posts: 5
    I set each ad campaign with GoogleAdword at $5.00 per day,  I then monitor my account daily to see which ads are working and which aren`t and make appropriate changes.  I`m very very happy with my Google Adwords advertising results. 
    My Google Adsense revenue pays me several hundered dollars a month which pays for one of my websites and site maintenance.  But for the average bear, clickthrough ad revenue is usually very very minute.  I have over 4 million page views per month and still only generate a couple of hundred dollars.
  • BarbRBarbR subscriber Posts: 5
    For my husband`s small business, he does the same...monitors everything
    very closely. He has had great success with Google, as well, in regard to
    new clients. However, I believe that some people don`t realize, also, that
    those are "ads" that someone has to pay for. For instance, my husband had
    a client who knew the name of my husband`s business, as well as his web
    address, but thought it was easier to do the original search that he used to
    find my husband`s business in the first place. So, instead of going direct to
    my husband`s site if he forgets directions to the office, etc., he uses that
    same search and clicks on my husband`s ad! My husband figured this out
    through his analytics, and told that client that he was getting charged. His
    client didn`t realize it. Just another way that those types of ads can be
  • BarbRBarbR subscriber Posts: 5
    I have learned a lot about this type of advertising through my husband, who
    swears by it. He has a very niche business, so the "click thru cost" isn`t that
    outrageous for him.   And, he gets a great deal of business with this form of
    advertising. Here is something interesting, though. His business is very
    focused just in the Detroit area. That is where he is looking to get his
    clients from and how he has his account set up. However, from time to
    time, he gets a click from "Sweden", or somewhere across the globe. He has
    been told that there is no gauge on Google or Yahoo`s end to monitor
    WHERE the people come from. So, while on vacation, he tested it, and he
    typed in "(his profession) Detroit" and from Florida, he was charged. They
    said they have no control over that at this time.
  • samdude3samdude3 subscriber Posts: 1
    I have used both Google and Yahoo Pay-per-Click Advertising. This is a very expensive way to advertise. I payed on average 1$ per click. The top bid was at roughly 9$! It`s times like these that a small business needs to get creative and find more effective ways of marketing. The big dogs will bury you with their advertising money. I am Still trying to Find ways to market efficiently and effectively. 
  • ChuckChuck subscriber Posts: 6
    His business is very
    focused just in the Detroit area. That is where he is looking to get his
    clients from and how he has his account set up.Hey Barb - both google and yahoo offer geo-targeting for search ads, so that your ads show only for users in that area. Does your husband have his account "set up" in the sense that his keywords include Detroit, or does he actually have the geo-targeting options set at the campaign level for his account?Chuck2007-1-25 8:30:50
  • RolfmanRolfman subscriber Posts: 0
    I`m Mark -- Barb`s husband.  I have definitely had a phenomenal return on my advertising dollar with Adwords and a great 6% click though rate.  As Barb mentioned, my business is very niche.  I`m in the health services industry (a form of massage/bodywork called "Rolfing"), so my target market is basically a 15 mile radius from my office in Birmingham, MI.I have set up the geo-targeting feature for a 15 mile radius, but I must have trumped that by having the word "Detroit" in the text of my actual ad.I expect people searching for what I do to use search terms like "Rolfing Detroit" or " Detroit Rolfers" -- as well as just using the term "Rolfing" or "Rolfer."  I do not have "Detroit" listed as a keyword.  But when I`m out of the state, if I google "Rolfing Detroit" my ad will pop up.  I don`t expect a lot of people from around the world to be searching for "Detroit Rolfers."When I e-mailed the Adwords folks about this concern of my ad showing up outside the geo-target, they basically said that the keywords over power the geo-target radius.  As a consumer, I expected that if I put in a 15 mile radius, that it would not go much beyond that target area.  I guess it`s a lesson learned (and a way for google to make more money on the uninformed).The best advice I have for Adwords "newbies" to control costs are: -- keep keywords very specific -- avoid content advertising  -- keep the daily budget low at first and monitor daily
  • ChuckChuck subscriber Posts: 6
    Seriously? Free lunch - if I`d known that was one of the perks of posting this way, I`d have been arguing with you a long time ago Joel.
  • BarbRBarbR subscriber Posts: 5
    I think that both Chuck and I will be beating down your door for the free lunch, so you better not hide on either of us! 
    The StartupNation forums are a great tool to start this type of discussion, and I`m more than happy to bring such a discussion to the forefront. 
  • BarbRBarbR subscriber Posts: 5
    JimM, Thanks for joining the discussion and sharing your viewpoints...we appreciate you adding to this discussion, since you have first-hand experience working on this specific account that encountered the fraud that was mentioned in the CDB article that I originally referenced in this post. 
  • RolfmanRolfman subscriber Posts: 0
    They upped your keywords that much?  Were you getting a lot of click thru`s before at .35 - .50?  
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