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What To Watch Out For With Click Fraud

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Some argue that click fraud is simply a cost that is borne by the advertiser and it should be factored into the overall campaign Return on Investment (ROI). If paid search is still delivering favourable ROI in comparison with other media, then what's the problem?

The problem, is that click fraud will always target particular phrases, which means that optimising on these phrases is difficult if they are not generating ROI. Perfectly valid phrases may be deleted as poor performers if click fraud is not taken into account.

Looking further forward, we may see a move to a form of paid search based on Cost per Acquisition (CPA) where the advertiser only pays where there is an event on the web page which demonstrates a lead or sale (for example, completing a registration or enquiry form).

With the recent advent of Pay Per Call arrangements, this is effectively a CPA arrangement which is much less prone to fraud. Of course, the search ad networks will resist such a CPA arrangement since it will hit their revenues and it is only really appropriate for transactional e-retail. Maybe it could become an option though for certain e-retail-related phrases and advertisers would bid higher amounts if they are paying for a guaranteed sale.

Whatever happens, it will lead to some difficult strategic e-communications decisions. Perhaps increasing prevalence of clickfraud suggests that companies should invest more to become more refined in their search engine optimisation which is not subject to this form of fraud. Another alternative is to increase reliance on affiliate marketing, since this is a CPA deal, and the risk of click fraud is borne by the publishers who are members of the affiliate network. One thing is for sure, it's a crazy situation where a billion dollar economy has grown up based around clicks on the humble hyperlink.

Tags: Google adwordsBing ads

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