Fraud: The unintended (and unwelcome) consequences of pay-per-click advertising

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globe and mail article
globe and mail article
Fraudulent ad bots have caused real problems for both pay-per-click publishers and advertisers. This image from a Globeandmail.com article, links to a story on the topic.

I, like most publishers who started our businesses during the print era, have mixed feelings about pay-per-click advertising. The concept, where Google has achieved market-revolutionary success, turned conventional advertising practices on their head.

In the old days, advertisers selected publishers based on their products’ demographics, circulation, and apparent relevance. They paid for their ads and if they had some wisdom, would develop systems to measure success. The highest success level — clients directly buying from them — often would be the hardest to validate, unless they operated in the direct response space.

The PPC model changed the rules. The auction system meant that advertisers competed with each other, setting the market value for individual ads in real-time. As well, they only paid when someone did something — clicking on the ad.

Then Google took things a step further about a decade ago, providing its ad-serving algorithms to other websites/publishers. The AdSense program allows publishers (like me) to post Google-served ads on our web pages. We receive about 70 cents on the dollar — a pretty good deal, on the surface, since we don’t need to do any selling. The ads also are contextually relevant. You’ll see ads for construction-marketing related services on this site (with additional relevance determined by your location and in some cases, your viewing history and recorded interests.)

These changes have had two rather serious effects. The first, the conventional publishing industry’s decimation. Newspapers, magazines and broadcast media (Google serves its video ads through YouTube.com and third-party publishers can link YouTube videos to their sites) have experienced an alarming revenue decline; and of course these losses have resulted in publications closing or experiencing heavy staff/cost cutting.

The second challenge: New forms of fraud.

The most blatant fraud problems occurred with the advent of junky “Made for AdSense” sites. These websites offered readers’ little if any value. Then less-than-honest publishers used various tricks to drive traffic to the crappy sites and, worse, set up deals where either bots or hired individuals clicked on the ads without any interest in the subject matter — but a clear goal to drive their revenue.

There are other nasty tricks. Not all the ads are pay-per-click. Many are sold on “per 1000 impressions” — and here, the tricks included “stacking” more than one ad in the same place, so one automated click would generate two “sales” and downsizing ads to one pixel — you can’t see the ad, but the visit registers, and the advertisers pay. The problems compound because the ads are often sold through automated networks connecting advertising services and publishers. The relationship between the advertiser and publisher — in the old days handled by agencies or direct sales representatives — now has been depersonalized and in effect is often invisible. (If it is still available, you can see more in this Globeandmail.com article.)

I’m quite aware, at least, of Google’s efforts to resolve click fraud. Several years ago, I allowed my AdSense code to remain on sites that hardly met the program’s standards. My account was rightfully disabled. Google doesn’t disclose publicly the number of accounts it disables, generally a life-time deal. Almost accidentally, I discovered the one way a disabled account-holder can return to the program — the distinction between personal and corporate or business accounts. (A distinction that makes sense, because a business as a separate legal entity could be hard to associate with any individual.)

I started posting and answering questions on the Google AdSense help forums and, after a run-in with a disgruntled disabled publisher, experienced my first sabotage attack. Here, a less-than-ethical individual deliberately conducts click fraud with the intent of having the publisher experience sanctions for breaking the rules. (I know, this is arcane, but it is like setting up a scheme to frame an innocent person with a crime.)  Google’s computer bots noticed the discrepancies, and disabled my account, again. This time however, I received some human help within Google, had my account restored, and a few weeks later received moderator or “Top Contributor” status within the forums.

This status deems me as a program expert. There’s no pay, but I belong to an interesting network of about 350 people with this status (across all of Google’s programs) internationally, and Google invites us to summits and meet-ups. Yet my AdSense revenue remains about $50 a month. I certainly couldn’t live on the pay-per-click advertising.  And, as click fraud and increasing numbers of publishers raise the supply and reduce the value of pay-per-click advertising, I expect the true revenue will decline even more. Advertising has become a very hard income-building game.

Why is this stuff important to you?  Well, when you decide to embark/test pay-per-click advertising, be aware that not all of your clicks will be from people who may seriously be interested in your product/service. You may be supporting fraudsters. I wouldn’t worry too much if you stick to pure Google search ads, but you will need to be more careful when electing to use the “content network” (that is, the third-party publishers, like me, who post Google contextual advertising.) You have two responses then; pay less or, go directly to the publishers where you know you can receive value and service, and advertise directly with them.  (You’ll pay us a lot more than if you purchased the same “space” with through Google, but you’ll be able to work with us on a package of value-added services and work with humans who really know the specific market.)

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