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Beware!!! Biased Companies “Research” Supports Product…Part 1 - Click Fraud
By Los Angeles Internet Marketing | September 30, 2007
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In recent times, I’ve noticed two major companies that have put out press releases about “itches” (things that bother advertisers), just to get focus on their products… I don’t have any issues with them doing that - I think it’s a brilliant marketing plan.
1) Find an “itch” - an issue, challenge or market opening
2) Create a solution (under wraps)
3) Scratch the itch (blow the issue, challenge or market opening up as much as possible- but appear unbiase, because you don’t yet have a solution)
4) Rake in the money - become the “authority” on the “issue, challenge or market opening”
Now, I’m not doing that just because I am jealous of those companies success. (I admit, I am jealous when I see such brilliant marketing. I know that these guys are going to just rake it in!) I’m also doing it because the two companies are doing to the ‘marketing’ community, and we as a whole should see through the marketing scheme.
It’s not that the marketing scheme is ‘evil’, but it could be the issue is not such a big issue. We really need to figure out if there really is a big problem/challenge/opportunity. Come on, these people slipped by our ‘biased’ screen because they raised the issue before they had a solution, and then all of a sudden “found the solution”.
That’s amatuer, guys and gals! I want a real opinion here! OK, for the two issues…
First is click fraud. Advertisers have been nervious about click fraud, and the lack of clarity for months… and indeed it is a big issue… My first run in with it was about 4 months ago, when my boss heard about click fraud network, and insisted on us putting it on all of our 8 sites…(annoyed the hell out of me… between me and you, we aren’t get our money back, why bother)
But I was intrigued, what was the click fraud network doing anyway? Was there any real value? Are they just taking the data, and using it for fodder, or can we actually use it to request refunds from google ourselves? Are their numbers really true? If they are, what can we do about it?
So I send an email to the CFN person assigned to one of our sites accounts… it turns out that no, there isn’t anything you can do about the fraud, and yes, we do have an “agency version” upgrade that… also doesn’t provide any refund services… help being? So they’ve helped me learn what exacly?
Meanwhile, they release quarterly reports that release alarming trends about “click fraud” with stats like 18% , etc. Great alarm statistics… but a load of BS in my opinion. I think I’ve got to agree with Andy Beal, that there’s alarmist opinions out there. The amount advertisers get cheated out of is probably around 2%.
In my opinion, click fraud network is just as opaque in telling people how click forensics measures invalid clicks… they are just looking to create a controversy about something that is already controversial, and jump in front of the train… I think they want to just become the independent third party to monitor Google - which would make them the authority.
I’m not criticizing the need for a third party monitor. I think it’s crucial that Google and Yahoo (as well as MSN and others) open up their network… I just don’t want a warmonger like click fraud network being there. I don’t think it benefits the internet, or business to have someone defining all “non sales intent” clicks as click fraud. (OK, I still don’t know the metrics used… but I do know that it isn’t simple. The simple stuff has been solved years ago, now it’s probably the bot networks that make an issue.)
A cool story before I move on to the next “vested interest exposure”. I am aqcuinted with Michael Leonard, CEO of Authenticlick.net. In fact, I had applied for a job for one of his other companies a couple of years ago when I was in college. They ran a “tax refund” company that specialized in getting money back from the governement for you. They would then take a share of your “found revenue”.
They started with a similar model with Click refund. However, they quickly changed their model to one that measures which types of clicks convert customers based on some complicated algorithms based in credit card fraud algorithms.
So when my boss started getting nervous about click fraud, I suggested him to talk to the guys at Authenticlick. We talked to them, and we basically deduced based on the information above, that getting money back from the networks for click fraud just wasn’t making money (probably because it was minimal), and therefore Authenticlick focuses on using their algorithm to maximize revenue.
All in all, if there has to be a third party auditor, I’d love to authenticlick there. They seem to be pretty balanced… They have some pretty impressive board members, including the scientist that created the credit fraud and click fraud algorithm, some former “biggies” of Overture, eBay, Yahoo, CNN. Also, I know their CEO personally, and I am extremely impressed by his integrity. I also don’t hear them crying “wolf” all of the time.
Some more resources for the click fraud battle:
- John Batelle’s Take on click fraud
- Oreillynet’s Detailed Research on Click Fraud
- Marketing Pilgirim’s recent news - look at the comments
Part Two will come next time! Till then, feel free to post you comments and hate mail below!
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Topics: click fraud, ppc, Yahoo, CEO's Lessons, MSN Adcenter, Pay Per Click Advice, Search Engine Marketing |
February 28th, 2008 at 9:26 pm
I suppose PPC is “more accurate” than Arbitron or Nielsen, because “every click is captured”, whereas the latter two use sampling to determine the audience size (and thus, ad rates). However, advertisers are becoming less happy about paying for “every click”, especially if those clicks don’t generate any income for them, fraudulent or not. Statistical projections of audiences also cost less money for the organizations taking the samples, which can be passed on as a savings to their customers.
FWIW, I’m no longer in the search industry. I work with people in the NANOG (www.nanog.org) community. One of the things I like about my new industry is when there are problems, such as the recent routing mishap causing lost access to YouTube, people discuss them openly and frankly. The search industry, for the most part, has tried to deflect attention from the problem of “unwanted clicks”.
February 29th, 2008 at 9:12 am
Thanks for the comment.
I do agree with you that there does need to be more transparency in the search industry. I just don’t like companies that use alarmist tactics. PPC has worked - and does work quite well for those people that do it (not that I’m so great at it).I think that paid search has worked so well because it came from the technical world - where people are comfortable being more candid. (I like candid!)
It is interesting to note that search fraud has become a forgotten issue in the past couple of months, with the whole “Yahoo has issues, someone better bail them out” taking it over. (Yahoo also responded better by immediately creating an advertisers suggestion site for click fraud… Google’s Schumacher on the other hand just got into an argument (which was useful), but continues Google’s path of not really working with advertisers to answer their concerns.
March 18th, 2008 at 4:38 am
Now that Yahoo! has partnered with ClickForensics, perhaps their claims about click fraud will be taken more seriously.
IMO, CF’s tactics are not alarming (although their numbers may not be totally accurate). They are responding appropriately to a threat that other organizations in other industries have acknowledged and joined forces to minimize.
March 18th, 2008 at 5:11 am
That is awesome! I’m very happy to hear that Yahoo has incorporated their data. (Someone should put out a press release - it would help Yahoo alot.)
I see where you are coming from on the CF’s tactics. I just felt that they were talking the talk without walking the walk - providing an upgraded service. They had found maybe $5-$10 worth of “fraud” out of a $160,000 / month deal - and didn’t even provide you with suggestions with what to do with that data.