Question: When should you suspect pay-per-click fraud and what can you do about it?

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Answer: Pay-per-click (PPC) fraud is a growing problem. Committed primarily by competitors, PPC fraud consists of repeated clicks on a paid link—via a manual effort or looking to increase their own advertisement’s placement without raising their per-click automated software—until a budget is depleted.

Some telltale signs of potential PPC fraud include:

  • An inexplicable surge in clicks
  • A disproportionate shrinkage in desired results, such as unit sales or visitor registrations, relative to click totals
  • Multiple visits from a small group of IP addresses

Currently, leading PPC engines such as Google and Yahoo!’s Overture do a fair job of internally tracking fraud and will credit your account for the bogus clicks if they determine that you’ve been victimized.

However, the best defense is to closely monitor your PPC program yourself. By investing in a system that tracks clicks, ranks the terms that drive traffic, identifies the originating search engines and time-stamps clicks, you will be well-armed to fight a malicious competitor.

If you suspect that you may be a victim of PPC fraud, you typically have 30 days to notify the search engine. If the clicks are fraudulent, chances are you’ll receive a refund.

Identifying and prosecuting the responsible party is a different story. While it’s possible to locate an individual through an IP address, further action often requires cooperation by an Internet Service Provider (ISP). And given most ISPs’ user privacy concerns, such assistance is unlikely without costly legal action.

Jim Grinney is a principal with 90octane, Denver. He can be reached at [email protected].

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