Pay-per-click ad fraud

Google in the US is being forced to take preventative measures over potential exploitation of it’s highly successful pay-per-click ad system.

Click Defense , a US company specialising in protecting clients from ad fraud (or click spamming), has filed a law suit against Google claiming that they are not doing enough to prevent fraudulent clicks.

Their are two separate ways that PPC ads are currently susceptible to exploitation. Firstly, businesses in the same market can constantly click on their competitors ads - therefore driving up their advertising costs. This would be relatively time consuming to perform manually. There have been cases of automated systems to drain a competitors ad budget but the pattern these methods generate makes them easy to recognise.

The second motivation for click fraud comes from webmasters who allow content related ads on their site, and are paid by Google when these ads attract a click.

Although thankfully not a major problem in Australia, Google has acknowledged that protecting the integrity of its advertising business is a top priority.

As Adam Penenberg from Wired News has noted:

• In the end, it’s the Googles of the world that are particularly vulnerable, something the company is well aware of. In its pre-public offering documents, Google flagged “fraudulent clicks” as a risk worth noting: “We have regularly paid refunds related to fraudulent clicks and expect to do so in the future,” it said.

In the meantime paying out refunds to advertisers is not great business for Google, we expect them to be increasing PPC security measures in the very near future.