Pay-Per click fraud dates back even from the time when Overture was still Goto.com. Only, it wasn’t as serious as it is lately since the pay-per-click (PPC) advertising is becoming very popular for getting highly targeted traffic as well as making an affiliate-based commission.

So, what’s pay-per click fraud?

In an ideal world, you and I will pay a fee to a site that offers PPC program and hosts our ads whenever those ads are being clicked by a visitor. The visitor then examines our site and eventually makes a purchase. We make money.

In click-fraud-world as it is nowadays, those clicks that you and I pay for are not coming from potential customers. But from scam artists, automated scripts known as “hitbots”, underhanded competitors, and even affiliates that just click on our ads in order to earn commission offered by the PPC providers. We lose money.

Fraudulent clicks or “click spam” can be defined as any kind of click that occurs with zero possibility for a conversion to occur, or a website visit not being originated by a legitimate user. Fraudulent clicks happen on a regular basis – even more than what we could possibly imagine.

India Times published a shocking article about a mother who gets down to work every evening while holding a baby in her lap. She is clicking on PPC advertisements. She doesn’t care about the ads, but diligently keeps count – it’s $0.18 to $0.25 per click.

“The trend is catching up in India,” – says Goutam Rakshit, chairman, Advertising Council of India – “It’s a numbers game as far as media buying is concerned. And anybody who can manipulate numbers gets the edge. This is unethical, and needs to be curbed.”

John Squire, the vice president for product marketing for Coremetrics, estimated that his company’s clients are spending approximately $10 million a year on fraudulent clicks. They are spending about $10 million on consumers that don’t exist.

How much are you paying for customers that don’t exist?

If you think your PPC campaign funds are depleting due to a fraudulent click activity, affiliate-generated fraudulent activity, or if you are simply suspicious of the traffic that occurs without any increase in sales – then perhaps you need to start getting tougher with your PPC analysis.

You can always ask for refund from the PPC provider running your campaign if you have suspected a fraudulent click activity. But, you won’t get the refund unless you have hard core facts to prove it.

And now, let’s get down to the facts.

1a. On a less technical note, define a unique URL for the sales page that will go through the PPC program. Clone your sales page and save it under a different URL.

If your page is selling vitamins for an example, and lets say your URL is hotvitamins.com, save it as hotvitamins.com/power. Or, create a sub-domain, such as power.hotvitamins.com.

Then, use this “cloned” sales page for your PPC campaign. That way, the only traffic coming to that page is from the PPC website. Only, do not link this new URL to any other website. You want to have 100% pure PPC traffic so you can keep an eye on it.

1b. For more technical people, you can assign unique session id to each of your URLs within your PPC campaigns. I’m seeing both techniques being used.

2. Use a basic log analyzer program to begin to investigate the data on the received clicks, including date, time, referrer, page views, URL, IP, etc. Your webhost should already provide you with a log analyzer program or a “Site Statistics Tool.”

If not, maybe it’s time for you to change your webhost, or you have to install log analyzer software yourself.

What you want to do at this stage is look for anything suspicious. Based on how comprehensive your “Site Statistics Tool” is, at the end of the day you want to be able to capture the IP address from each click.

Then, look at the quantity of the clicks from each IP address, click behavior and click timing. Run a “reverse IP address lookup” to see who is making those clicks.

Basically, you want to be able to gather as many details as possible for each and every click. Whether you will depend on the tool your webhost is providing you, or you will install a software yourself, or you will contract it out, make sure you have the capability of capturing the IP address.

If the IP address was not captured, or cookies were not generated, that’s an indication of clicks being generated by automated scripts known as “hitbots.”

3. Start tracking the conversion ratio. You can choose to track conversions either by using your own conversion tracking system, or by using a third-party conversion tracking tool. There are plenty of low-cost conversion tracking solutions.

In some cases, the services offering to track your clicks will have a sales conversion option available for you. That’s a service you definitely want to get if you don’t want to deal with it yourself.

But, if your sales ratio is very low or even zero, your chances are very high that you’re being bullied by someone. It could as well be the low demand of your product or a high competition, but if you’re getting high amount of traffic from your PPC campaign and low to zero sales, the chances are very high that you could be a victim of click-fraud.

So, what do you do if you suspect that you’re receiving fraudulent clicks on your PPC campaign?

4. Be meticulous – very thorough. Make sure you have data that points to questionable traffic. You have to have evidence of the suspicious clicks. Ensure that you have a legitimate case even if you have to double check your records. The PPC provider will ask you for facts and not an opinion.

5. Carefully document your traffic analysis during your PPC campaign. Document anything related to the campaign – handwritten notes, email exchanges, scribbles, reports, screen shots, etc.

6. Be sure to record every one of the clicks, whether they’re from your server logs or from a third party processor that you might be contracting for this purpose.

7. Document all relevant competitor positioning. Ever since Google changed its policy on PPC ads, there have been various reports on competitors of a same product manipulating Google’s new system.

It’s the people with more technical knowledge manipulating the system for their own good while killing the campaigns of the people with no technical knowledge. They’re not breaking Google’s rules, but they know when to pause their campaign (knowingly) and when to reactivate it again.

8. On the other note, you might want to contact your competitors to see if they’re experiencing click fraud. Your PPC campaign might not be the only one experiencing these fake clicks. Two victims’ cases presented to the PPC provider will make a stronger case.

9. When feeling highly confident that you have a strong case and clear facts that you’ve been a victim of click fraud, contact your PPC account representative and submit your data with a request for refund. Their investigations can, and do take time.

10. Meantime, continue to monitor your click activity and record any additional data.

It’s unfortunate that we have to be so much involved to protect ourselves. We pay for advertising so we can free up our time and let someone else do it. But with the seriousness of PPC “click spam” nowadays…….. you snooze – you lose.