A Hard Look at PPC, Click Fraud and the Alternatives
Written on 05.05 by Admin
With the creation of the Overture and Google Adwords systems, many webmasters believed they had finally hit the mother lode. It was no longer necessary for small online businesses to invest large amounts of money into Search Engine Optimization (SEO) services to gain high search rankings in the natural search results.
Even webmasters committed to SEO campaigns began to realize its fleeting nature. Given frequent search engine algorithm changes, optimizing a website was no guarantee that in 6 months or less it wouldn't be back to square one and page twenty of the search results.
PAY-PER-CLICK SEARCH ENGINE (PPCSE) PLACEMENT
With the advent of the PPCSE model created by Overture, and followed by Google Adwords, webmasters felt like they had finally found the level playing field that everyone talks about. Hiring a SEO company was no longer necessary to crack the top search engine results. A Page One placement could be purchased and often for far less than the cost of a SEO company's services.
Webmasters discovered that they could get traffic to their website for as little as one cent per click.
Pay-per-click, however, has evolved over the last 5 years and not to the benefit of most webmasters. Although five cents is currently the average starting bid price at most major search engines, many sought after keyword terms can cost as much as $30 - $50 per click. Given the increasingly competitive nature of PPC advertising and spiralling costs, many small- to medium- sized businesses today might be better served hiring a good SEO company to search optimize their websites.
WHO IS CLICKING YOUR PAY-PER-CLICK LINKS?
There are four types of people who click on pay-per-click ads. Knowing who these people are helps explain why experts keep telling us that 20% to 25% of all clicks on PPC listings are "fraudulent clicks".
Personality Type #1: True-Blue Prospects
These are the people for whom you have placed your pay-per-click ads. They see your advertisement; they like what they see; and they click your link to see if you can actually serve their needs.
Personality Type #2: Accidental Clickers
Every once in a while, even my finger misfires, and I click an advertisement that I did not intend on clicking. My first thought is usually, "Oh no...", and my first action is to find the back button.
I didn't mean to cost that person money by clicking his advertisement... but I did. It was an accident. Now, the advertiser has to pay for my mistake. That bites.
Personality Type #3: Jealous Competitors
I would like to think that all of my, and your, competitors are fine, upstanding people. And most of them are. But, there are some who are not, and they click on pay-per-click links just to be spiteful or just to cost their business rivals a few dollars.
Believe it or not, a good percentage of "fraudulent clicks" are believed to be clicks perpetrated by people against their competitors.
Personality Type #4: True-Blue Fraudsters
Not that long ago pay-per-click providers realized that there was tremendous opportunity in offering small website owners a method for cashing in on their limited traffic.
Today, a webmaster can go to any number of pay-per-click services, add a small piece of code to a webpage and start serving paid advertising the same day. Webmasters thus become revenue share partners with the PPC provider, splitting revenues with the PPC provider for each click.
Ethical webmasters, of course, put the needs of their advertisers first and focus on putting eyeballs on their website so that visitors can click on the advertising links.
But, the word "ethical" doesn't exist in the vocabulary of some webmasters. These are the "true-blue fraudsters" who believe in making "revenue at any cost... no matter who might be hurt by their actions." They devise schemes to have their own ads clicked in order to drive up their revenue share.
These webmasters, although a minority, are responsible for the vast majority of fraudulent clicks. And, they are the same people that should be taken out behind the barn, for a good old-fashioned flogging --- one lashing for each stolen dollar would be fine with me.
THE UNSEEN COSTS OF THE PAY-PER-CLICK SEARCH GAME
If the experts are correct in estimating that 25% of all clicks are fraudulent, then you are paying out 33% more than you should have to pay to get your business.
If you are converting PPCSE clicks-to-sales at a rate of $20 per transaction, then you should be aware that your actual conversion rate for non-PPCSE advertising would cost you an average of $15 per transaction. By escaping the pay-per-click search engine model, you could in effect make an additional $5 per transaction by cutting the fraud out of your marketing budget.
Personally, I would rather not pay the pay-per-click mafia the $5 a transaction that they are exacting against pay-per-click advertisers.
by: Bill Platt
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