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Most PPC networks have measures in place to protect you against click fraud. Overture tracks more than 50 data points, including IP addresses, browser info, users' session info and what they call "pattern recognition." They have a proprietary system" in place for detecting fraud and a specialized team that monitors things and works with the advertisers to stop it.
Google offers suggestions to avoid click thru fraud, such as "using negative keywords" to keep your ads from showing up for products and services that are unrelated. They also suggest adding tracking url's to your links so you can track the traffic coming from Google. An easy way to do this is to add a ? to your links along with the identifier. For example, a tracking link to identify Google would look like this:
If you go through your log files, you'll be able to see your Google traffic at a glance.
If you suspect fraud, Google asks that you contact them right away, as they have a team of researchers that will investigate. They also take action to block future impressions from anyone they identify as committing click fraud. Like Overture, they also have "proprietary technology" that distinguishes between normal clicks and invalid ones. Google never bills you for any "bad clicks" that are caught by their system.
So what's an honest website owner to do? You need to be alert to any suspicious activity" by researching your server logs or stats. If you're experiencing a lot of clicks and no sales you'll also want to take a closer look. You need to watch for any spikes in traffic, usually on one keyword or phrase and coming from only one PPC source. You need to measure and track all of your PPC accounts closely.
If this sounds like too much work, you may want to look at an outside service to take care of it for you. A variety of new services have opened recently to help combat the click fraud problem.
1) Keyword Max: http://www.KeyWordMax.com
Offers up a service called "Click Auditor," which monitors the activity on your PPC accounts and alerts you to any suspicious activity. You can request a free demo at the site.
2) Click Detective: http://ClickDetective.com
A website monitoring service that uses sophisticated
tracking mechanisms to determine whether "visitor
behavior" is normal or not. Offering a 15 day free
3) Who's Clicking Who: http://WhosClickingWho.com
An independent auditing service that tracks individual users for fraud. Can also detect abuse coming from proxy servers. A one month subscription is $79.00, which includes free installation and up to 50,000 transactions per month.
4) ClickLab: http://ClickLab.com/products/click-fraud
This service isolates bad clicks with a scorecard based detection system. Pricing starts at $50.00 per month and is based on the number of sites you need to track and their page views.
ClickLab also has a nice white paper you should download while visiting: "How to Defend Your Website Against Click Fraud."
Click fraud isn't going away anytime soon. If anything, it will probably get worse before it get's any better. It's up to you as a vigilant website owner to do what you can to keep your PPC advertising costs down. You can't stop it, but with the right tracking in place, it can be managed and controlled, and hopefully kept to a minimum.