What is Impression Fraud or How Grinch Stole Cindy Lou's better Web Site ROI ?

Posted by Ron Arthur on: 2005-08-24 17:06:36

Self SEO > Pay Per Click Articles

Impression fraud is a special case of click fraud. The prototypical impression fraudster is the competitor who resorts to unfair means to gain an advantage. His primary motivation is to reduce the ranking of his competitor, and then save himself money by inserting his own ad at a lower rate. Another possible motivation may be a hit-and-run operation (random act of violence). Given the potentially devastating consequences it could have on a person's web site return on marketing investment, it could even be a disgruntled employee.

To illustrate the mechanics and motivation of Let's call this individual Grinch. Assume that Cindy Lou(our protagonist) has an advertisement for Christmas trees running on google ad words. Cindy Lou's Pay Per Clickadvertisement has been doing rather well, getting a lot of click throughs. She doesn't have to bid a whole bunch to rank high on the sponsored links because the position is a function of bid price and Click Through Ratio. She is getting decent traffic through her PPC campaign. The traffic is very focused, a large number of visitors end up converting. The trees are moving off the lot and things are shaping up rather fine. Grinch too has an advertisement running. Unfortunately (for Grinch), his advertisement is not getting a lot of clicks. In fact, his CTR is so dismal that he has to pay ever increasing sums just to keep it displayed. His ROI is not that great given his higher cost base for the PPC bid. He does not like the fact that Cindy's campaign is doing rather well. Not one bit! So he does something devious.

Grinch toggles off his own PPC ads and then does a lot of searches for keywords appropriate to Christmas trees. He searches on google, and asks his friends to search too. Only he never clicks on Cindy Lou's ad. He runs his campaign for a few days, and Cindy sees her CTR go down and she is at the bottom of the heap. It's now down to a level where Grinch sees a level playing field and steps in toggling his PPC ad back on. Grinch is suddenly back in business, while Cindy has to keep up somehow. Remember, it's almost November and she has to sell off her trees rather soon. Anecdotal evidence suggests that the loss from this activity may well run into thousands of dollars for larger advertisers(maybe when Cindy Lou Trees Inc. goes nationwide).

How to Prevent your Self from Impression Fraud?

For impression fraud to be effective it has to happen at relatively high volumes(usually accompanied by a “traffic spike”). The result will be lots and lots of impressions and a very low CTR. Also, if its done for competitive reason, Grinch may identify himself (if you are really keeping tabs on things) because he has to switch his ads on and off. Reporting it to Google immediately will help but will not get you any compensation. Google will still charge you more money for ad placement in a certain position. The impression fraud attack is extremely insidious, because even though the consequences can severely affect the return on investment ( ROI), Google's policies don't allow refunds to take place.

The take home point is that you have to keep tabs on the traffic, including traffic that is not getting to your site. It is imperative for you to use a web metrics product on a periodic(and frequent basis). A lot of times, we see people invest in a log analyzer or even a hosted web metrics application without devoting time and resources to get actionable data. If you are limited in terms of resources, you should be able to set alarms through your web analytics package and should be able to receive alerts. Ask your vendor if they have the ability to upload your AdWords data into your web metrics account. You have to reconcile the data from what your historical CTR has been to your current CTR, and your costs. It will help to level the playing field, calculate your effective ROI, and may even allow you to compare google with competing services available from Yahoo, MSN and Ask Jeeves.

About the Author

Ron Arthur is a Search Engine Optimization Professional working for a Web Analytics company Sofizar http://www.sofizar.com that is currently developing a click fraud solution

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