Google AdWords Click Fraud A Washington Post Cover Story

Here's today's cover story on Google AdWords click fraud. The national media is beginning to document the lack of controls and seedy underside of the Search Engine Marketing / Pay Per Click Advertising industry.

Peak Positions specializes in Organic search engine optimization and works with leading companies worldwide to eliminate click fraud activity. We encourage our accounts to monitor and assign INTERNAL PPC GATEKEEPERS vs. outsourcing to third party SEM shops for PPC/SEM Management.

Keep in mind that SEM management firms and the search engines themselves have motives and cause to encourage increased pay per click activity. Higher PPC/SEM click activity equals higher PPC/SEM management fees and revenues all around.

The most effective search engine optimization campaigns require strategic organic search engine optimization as the basis with smaller, more manageable, and cost controlled, Pay Per Click campaigns laid in over the top to maximize keyword exposure and market reach all within budget.

History has proven that quality organic search engine optimization is the most effective form of internet advertising and requires proven organic seo specialists to coordinate and implement organic seo solutions that incorporate the unique technical architechture of each website involved and also require a delicate balance of marketing savvy and in-depth technical skill sets.

It is also known that acquiring cost-effective, quality organic SEO skill sets are extremely difficult to acquire.

We encourage any organization addressing search engine marketing through either Organic SEO or Pay Per Click keyword advertising campaigns (either SEO, SEM, or both) that is not experiencing significant return on investment and gains in new business revenues to contact our organic seo firm.

Peak Positions is 100% dedicated to organic seo and delivering premium organic keyword positions for all of our valued clients. We offer years of organic seo experience, the highest level of professionalism, quite possibly the strongest client roster, and most importantly, the highest client retention rate in the Search Engine Optimization industry.

Our client roster serves as our best endorsement in terms of substantiating our seo capabilities and technical skill sets and our clients are the biggest benefactors as they continue to enjoy premium keyword rankings in all of the major search engines: Google, Yahoo, MSN, AOL and more.

If you are looking for real SEO answers and are seeking to sidestep all of the self marketed hype, conjecture, and endless SES/SEM Pay Per Click Promotional Bantering, constant PPC promotional conferences, and the steady stream of outrageous email offers pertaining to Instant Keyword Ranking Dominance and the latest Rags to Riches Linking and PPC gimmicks plaguing our burgeoning SEO industry feel free to contact our firm. Pay Per Click is a dangerous and expensive advertising game. It does provide rewards and can drive serious new business revenues, but not without campaign controls, knowledgeable guidance, experienced partners, and trusted internal management oversight.

Caution: diving into Pay Per Click head first with the "Keyword Rush" blinders on is never a good policy. Test the waters and research the PPC territory, your CEO, CFO, and accounting team will thank you for proceeding steadily and with caution.

Here's the latest click fraud piece from today's Washington Post.

It Pays To Monitor Those Server Logs!

In Game of Click and Mouse, Advertisers Come Up Empty

Reprint of story by Leslie Walker - Washington Post
Thursday, March 16, 2006;

Radiator.com got a jolt this month from the firm it hired to audit the nearly $40,000 worth of sponsored links it buys every month from Google and Yahoo.

It appears that many of the clicks on the Web site's search-engine ads were made not by potential customers but instead by automated programs or people trying to drive up Radiator's advertising bill. Like other advertisers that place links on search engines, Radiator.com pays only when people click on the links.

After analyzing where and when each click came from, auditing firm ClickFacts Inc. estimated that 35 percent of the referrals that Radiator paid Google for stemmed from bogus traffic. Likewise, 17 percent of the leads that came from Yahoo search results were illegitimate.

"They are reporting some very high fraud rates to us," said John Thys, director of Internet marketing for 1-800-Radiator, the Benicia, Calif., distributor that owns Radiator.com. Thys said his firm will present the report to Google and Yahoo next week and request a refund for the invalid clicks.

Such activity, commonly known as click fraud, may be far more common than search engines are willing to admit. Over the past year, click fraud has mushroomed into a problem so thorny that some analysts fear that it could bring the high-flying Internet economy to its knees.

I don't know if the issue is that serious, but I'm convinced that it deserves more attention than it's getting, especially since Google distributes paid links all over the Web and shares ad revenue with thousands of sites.

Think about it: If revenue from paid links suddenly were to shrink or dry up, you could kiss a lot of Web sites goodbye.

Google has repeatedly pooh-poohed click fraud, contending that it is a minor annoyance that it has under control with automated detection technology. At a meeting with analysts two weeks ago, chief executive Eric Schmidt said click fraud "is not a material issue." Co-founder Sergey Brin said such cases amount to "a small fraction" of Google's ad clicks.

But six days later, Google surprised analysts when it agreed to settle an Arkansas class-action lawsuit by setting aside $90 million worth of ad credits to advertisers that can show invalid click charges dating to 2002.

Few other details were released regarding terms of the settlement, still to be approved by the Arkansas court. Yahoo and six other search engines remain defendants in that case.

"We stand firmly by our proprietary click-protection system and look forward to vigorously defending our system," said Gaude Paez, a Yahoo spokeswoman.

Some analysts worry that Google is rushing to establish a legal precedent that could undermine a more serious click-fraud suit pending in federal court in California. That suit, which alleges that Google knows that click fraud is rampant and has not taken significant steps to prevent it, will be considered for class-action status at a hearing in May.

"Google is getting a deal," ClickFacts co-founder Michael Caruso said, referring to the Arkansas settlement. "This is chump change to them."

Google reported $6.1 billion in revenue last year.

Caruso said his year-old firm has seen click fraud rates for Google ad campaigns range from 20 to 40 percent. Other studies have estimated that bogus clicking accounts for 10 to 30 percent of all clicks on sponsored links.

Click fraud is not new, of course. It has plagued pay-per-click advertising ever since Overture Inc., later bought by Yahoo, pioneered the ad model in the 1990s.

At Yahoo and Google today, merchants compete in online auctions to set pricing for keywords that trigger text links on search-results pages. Radiator.com, for example, pays from 80 cents to $1.20 for each click on sponsored links that appear when someone searches for "radiator," "car radiator" or other keyword search phrases.

The two most prevalent types of click fraud are competitive sabotage -- rivals clicking to drive up ad costs for competitors -- and affiliate spam -- affiliates clicking on paid ads appearing on their own sites to boost their share of ad revenue from Google or Yahoo.

Analysts say affiliate spam is more common and really took off after Google launched its AdSense network, which distributes paid links to thousands of non-search sites. They get a share of Google's ad revenue based on clicks, giving unscrupulous publishers an incentive to inflate their clicks.

Yahoo started a similar ad network last summer but limits participation to invited sites to maintain quality and reduce the risk of ad spam, Paez said.

Over the past 18 months, cottage industries have popped up on both sides of this click-and-mouse game.

For $29 or so, anyone can buy fake traffic generator software such as Smart HitBot, Fake Hits Genie and Fakezilla, programs that can send bogus traffic to any Web page or ad.

But click-fraudsters have to watch out because more and more electronic sleuths are trying to catch them. Start-ups with names like Click Tracy, Click Detective and WhosClickingWho analyze traffic and tell advertisers about suspicious activity, such as a surfer in Malaysia repeatedly clicking on ads for a dentist in Baltimore.

Established Web analytic firms are adding fraud-detection capabilities, too. ClickTracks, for example, recently started a service that analyzes 20 variables surrounding each click and compares them with historical data to determine which are legitimate.

Jessie Stricchiola, president of Internet ad consultancy Alchemist Media Inc., said the big stumbling block that search engines face in combating fraud is lack of access to evidence that could prove it -- namely, what customers do after clicking on ads. Bogus visitors almost never buy anything, while a certain percentage of legitimate customers do. Advertisers, however, are reluctant to share sales data with the search engines.

Stricchiola is pushing for standards in Internet ad auditing. She recently teamed with Fair Isaac Corp. to study whether its formulas for detecting credit card fraud might help identify click-fraud.


Cynics fear that the search engines are too afraid of how much revenue they might lose to truly commit to fighting click fraud.

But I can't believe they'd be that stupid. They must know that if they don't find a solution soon, this escalating crisis of confidence could cripple search advertising for years to come.

Amen!!!

Peak Positions organic seo has been helping our clients reduce and eliminate PPC click fraud for years. Here are some available resources that can help reduce or eliminate click fraud.

Peak Positions posted this click fraud collusion story months ago.

Link contains many leading resources in terms of stopping click fraud.


Posted by:

Jack Roberts
Peak Positions, LLC
http://www.peakpositions.com


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The Wall Street Journal Reports That Google Will Have to Turn Search Data Over To The Government

Here's The Sad Story...

U.S. Court Likely Will Force Google To Turn Over Keyword Search Data

Wall Street Joural - 3/15/06

Google likely will have to turn over keyword search data to government lawyers making a case for a child-pornography law, but a much smaller amount than originally requested, a federal judge said. U.S. District Judge James Ware said he is inclined to require the company to respond to a Department of Justice subpoena seeking the text of search queries and randomly selected Web addresses from Google's index of Internet sites.

During a hearing in San Jose, Calif., the judge said he was persuaded partly by the government's willingness to seek only 50,000 randomly selected addresses and 5,000 search queries instead of the one million addresses and millions of search queries initially sought. The government filed suit in January seeking the information after Google, of Mountain View, Calif., resisted complying with an August subpoena.

"What I've been trying to balance is the interest society has in the litigation with the interest of a private company," Judge Ware said.

The government hopes to use the information to defend its Child Online Protection Act, a law designed to shield minors from sexually explicit materials on the Internet. The Supreme Court blocked implementation of the act and returned the case to district court in Pennsylvania, where the Bush administration is battling claims from the American Civil Liberties Union that it violates the Constitution's First Amendment right to free speech.

The government claims the Google information will help it determine whether filtering software can keep minors from seeing offensive material online or whether the stronger measures of the act are needed. It has received search data from Yahoo Inc., Microsoft Corp., and Time Warner Inc. Representatives from Time Warner's America Online unit, Yahoo and Microsoft wouldn't comment.

The dispute has drawn national interest to the Google case for signs of how readily U.S. courts will let the government subpoena search data for investigations and surveillance. The judge said he was troubled by the privacy issues surrounding the release of the search queries, where individuals enter search terms into the Google site to locate information and Web pages.

Judge Ware asked government lawyer Joel McElvain if the google keyword search queries couldn't inadvertently reveal personal information such as Social Security numbers, credit-card numbers or the sexual preference of a public figure. Mr. McElvain said the government didn't intend to use any personal information that might show up in the queries. Google Associate General Counsel Nicole Wong said the judge's questions and concerns "reflected our concerns about user privacy and the scope of the government's subpoena request."

Microsoft Preps For Google Fight

Redmond Claims The New MSN Search Engine is Finally Ready to Battle Google

Software giant arriving way late to the keyword search party.

Microsoft sales executive, Joanne Bradford, spent her early years at Micorsoft wondering if the software giant was truly serious about maximizing keyword search revenues.

When she joined Microsoft in 2001, Micorsoft lacked a search engine of its own and had no clear Web advertising strategy. Google and Yahoo proceeded to make multibillion-dollar businesses of search-related advertising while Microsoft slept.

"I wasn't sure the first couple of years that we were here to stay," said Bradford, Microsoft's corporate vice president for global sales and marketing. "I thank Yahoo and Google for proving that a software company can be a media company and a media company can be a software company."

These days, Microsoft is very serious about grabbing a larger piece of the $15 billion U.S. search market. Micorsoft has revamped the MSN search engine and also developed a new advertising system called MSN AdCenter to sell pay-per-click ads across MSNs Web content and related services.

Microsoft plans to overhaul its entire web presence, consolidating e-mail, instant messaging, online PC security and search at its Windows Live site along with new offerings like an online marketplace in order to increase traffic and create valuable space for advertisers.

However, the company is arriving years late to the keyword search party and faces a steep uphill climb.

Microsoft's MSN Internet unit generated $1.4 billion in online advertising revenue in its past fiscal year, while Google pulled in $6 billion in sales and Yahoo racked up $4.6 billion in 2005.

MSN's strategic push combined with a steadily growing Internet advertising market -- now expected to reach $26 billion in 2009, according to Forrester Research -- should boost Microsoft's online advertising sales.

"I wouldn't be surprised if Microsoft could double (its online advertising revenue) in three to five years," said one independent research firm executive.

MSN TUNES-UP SEARCH ENGINE

Analysts caution Microsoft trails Google and Yahoo in producing relevant results from its search engine and unless it can close that gap, it will be difficult to gain market share in keyword search, the largest segment for online advertising.

Like Google and Yahoo, Microsoft lets advertisers, through MSN AdCenter, bid how much they will pay each time a user clicks on their ad. Until recently, all of the Pay Per Click search ads on Microsoft's search service were sold by Yahoo.

Yahoo (Overture) still sells three-quarters of Microsoft's paid search ads, while the company tests adCenter in the United States. It plans a full switch to adCenter in the next few months.

Microsoft officials said MSN adCenter provides advertisers with demographic data to better target customers with projections about the search user's age, sex and location. Eventually, MSN wants to integrate projections about the user's wealth, preferences and online behavior patterns.

Backed by registration information obtained from 230 million hotmail e-mail accounts and 205 million instant messaging users, Microsoft said that database allows it to provide more accurate projections than Google or Yahoo.

Microsoft envisions adCenter to one day be a one-stop shop for search advertisers to gather information as they bid for clicks and sponsor position for pay per click ads listed in MSN search results pages, Microsoft-related sites and services, non-Microsoft sites, mobile phone software or even online Xbox video games.

"We're really starting to see Microsoft gear up. Of course, the company was asleep at the wheel for a lot of years," said a search engine analyst.

One major hurdle is that SEM ads placed on Microsoft's search results reach only a fraction of those from Google and Yahoo.

Google finished January with 66 percent of the U.S. search market, trailed by Yahoo at 22 percent and MSN at 11 percent, according to Nielsen//Net Ratings. Microsoft stressed that online advertising is not a zero-sum game.

"The online advertising market is growing at such a rapid pace and we want to participate in some of that," Microsoft's Bradford said. "This isn't a winner-take-all proposition." MSN's focus is to become a more profitable third player in the keyword search marketplace with aspirations of one day becoming an even more competitive and profitable number two to Google.

MSN made no comment regarding PPC Click Fraud Controls.

Google's Big Daddy Seeking Content

The New Google "Big Daddy" Algorithm Update has rolled out and after extensive analysis of Google's new algorithm one thing remains clear...

"Big Daddy's" Hungry for Relevant Content!!!

The Googlebot spider family have had their algortihms updated and are favoring urls based on these Four Factors:

1) Relevant Content

2) URL naming conventions

Database site? ...Dynamic urls?... is your ecommerce portal still struggling after an expensive MOD rewrite?... only Peak Positions dynamic database optimization accounts are privvy to an exclusive inside track with actionable URL naming conventions heavily favored by the googlebots.

3) AdWords Partner URLs receiving favoritism

4) Affiliate Heavy / eCommerce Link Farm Sites falling fast.

Google's "Big Daddy" algorithm updates are throwing away URLs with high outbound link counts. The googlebots are also burying URLs loaded with redirect links, invalid page code, multiple cookies, and sticky web analytics/user tracking codes.

Time to Address Website Content Vs. Linking

How important is HTML text content to Google? Let us first answer this million dollar organic search engine optimization question with another, much more important question in terms of organic website optimization... What else is there? ... Really, why even have a website if you are not making every effort to deliver quality information and relevant content to website visitors?

Websites and companies that understand their purpose and focus on serving their in-market website users with helpful and useful information will always be successful.

Many advertising agencies, graphic houses, SES attendees, and marketing directors read the misleading and endless hype in their emails with offers of immediate organic SEO Success and then mistakenly begin to believe that incoming links from third party websites are the ‘magic silver bullet’ needed to drive their content-light sites into prominent organic keyword ranking positions on Google, MSN and Yahoo-Inktomi.

Don’t fall into the links trap and take your focus off of relevant content.

Links from high ranking, above board, theme-related, quality websites pointing out to your site always play a role and need to be implemented, however they hold very little value if your site is not serving users and spiders with quality content.

Is your site delivering the content that users are seeking? Remain focused on serving users first and foremost with relevant content before reaching out to unknown sites in an attempt to increase your link popularity scores.

Keep some of Google’s basic principles in mind when working on your website.

Don't deceive users, or present unique page content to search engine spiders that is not being made available to users.

Don't participate in link schemes designed to increase your site's link popularity.

In particular, avoid links with web spammers, Free For All Link Farms (FFAs), or "bad link neighborhoods" on the web as your own keyword rankings are often adversely affected by these types of suspect links.

Don't use automated computer programs (Web Position Gold, Submit Wolf, Traffic Blazer, etc.) to submit pages. Automated submission software programs consume computing resources and breach the major search engines terms of service.

When in doubt, remain focused on serving users with relevant content.

Submitting too often using automated submission software programs has more negative consequences with Google than cloaking. Submitting redundant urls also has negative consequences as just badgering Google, MSN, and Yahoo with repetitive URL submissions can get a site/url pulled for several months, sometimes for a full year or more.

Hopefully the truth about Cloaking, Links, PageRank, & Google's Mythical New Site Sandbox, will all someday come to the front again as the SEO grapevine has primarily been cluttered with inaccurate hype on these popular SEO topics in recent weeks.

Especially from the Search Engine Marketing / SES Strategies crowd. So much SEM/SES hype and unfoundeded SEO conjecture (disguised as SEO email newsletters) many with false promises of immediate top keyword ranking offers, including these recent Microsoft Outlook SEO headlines:

1) Why take the time to optimize? buy immediate keyword exposure.

2) Don't take the time to open up your site to the search engine spiders long-term, this takes too long...get out your credit card and sponsor any meaningless, broad-based, off target keyword that you would like today!

3) Outsource Pay Per Click Management and Your Dreams will Come True!!!

4) Pay Per Click and SEM the quickest ways to SEO(?) success.

5) Ignore keyword search preferences (who cares that keyword searchers prefer organic search results 7 to 1 vs. paid search listings) that only reduce SEM/PPC management fees.

6) Gain additional knowledge and insight (?) with the latest exclusive SEO analytics tool (that simply spins and dresses up readily available free data from your own server logs) requiring spider roadblock code that pushes sites further down in the organic results and forces bigger SEM spends!

Instead Let us Suggest That You Keep these key SEO Facts in mind at all times:

1) Pay Per Click Fraud is at an all-time high

2) Pay Per Click Rates Are Increasing Daily

3) Keyword searchers prefer organic search results 7 to 1 !

4) Premium Organic Keyword Positions Serve as Website Endorsements

5) Buying Website Traffic is expensive and leads to poor brand impressions and low conversion rates

6) Quality organic search engine optimization that is above board, ethical, compliant and favored by the search engine spiders is the most effective, LONG-TERM Internet Marketing Strategy Available Today!

Organic SEO vs. PPC

Google Agrees To Pay $90 Million in AdWords Click Fraud Settlement

Google has agreed to settle a class-action CLICK FRAUD LAWSUIT with an offer to provide up to $90 million worth of PPC AdWords credits to website owners who have been charged for invalid clicks. The click fraud settlement, announced today still has to be approved by the judge.

Rumors are that the judge is also seeking monetary damages and Click Fraud system improvements from Google that could help curb escalating Click Fraud trends in the AdWords Pay Per Click system.

Google willingness to settle only with 'make good clicks' on future AdWords advertising campaigns vs. a cash settlement, and abruptly push the AdWords Click Fraud issue under the rug once again is not pleasing the judge. Hundreds of Google Click Fraud lawsuits are flooding the court system and the judge is receiving pressure from the federal courts to stem the Google click faurd litigation tide.

This new AdWords Click Fraud settlement stems from a lawsuit filed in Arkansas by Lane's Gifts and Collectibles, which presented website server log files that demonstrated they had paid for Google AdWords clicks that were fraudulent. Lnae's sought class-action status on behalf of several other Google AdWords search advertisers.

Google general counsel Nicole Wong (one of nearly 400 litigation attorneys now on Google's staff) claims the companies are "near a resolution."

Under the proposed agreement, Google would allow any AdWords advertisers who believe they have paid for invalid clicks at any time since 2002 to contact the company and apply for reimbursement with AdWords credits. To date, Google required AdWords PPC advertisers to contact it within 60 days of the alleged fraudulent click acitivity for log file review.

Google will offer AdWords credits that can be used to purchase new advertising with Google. "We do not know how many advertisers will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million," Ms. Wong says.

This single case is only the tip of the iceberg as Google AdWords Click Fraud is running rampant.

If your are evaluating Organic SEO vs. PPC click fraud needs consideration and analysis.

If you are outsourcing for PPC/SEM Campaign Management and your monthly invoices are increasing substantially along with your SEM management fees, consider pulling PPC/SEM back in house or at least assign an internal gatekeeper, monitor your website server logs and police your PPC campaigns...it might just save your budget.

Also analyze your organic search engine optimization strategies and contact a proven organic search engine optimization provider that is dedicated strictly to organic seo best practices.

If searchers prefer organic search results 6 to 1 versus the paid advertising (PPC listings) isn't this cause enough for you to address organic website optimization and make a LONG-TERM organic seo investment resulting in real website traffic and new business vs. short-term, leased, expensive, "click fraud riddled" SEM website activity.

Stay Tuned as this Peak Positions Organic SEO Blog we will provide details on many Google AdWords Click Fraud Lawsuits now active and preceeding in the courts in 2006.

Pay Per Click Rates Skyrocketing

PPC/SEM Click Fraud Also on the Rise.

Keyword prices continues to increase substantially. In recent weeks several well known brands have ripped through their quarterly SEM budgets with little conversion to speak of. Just last week eBay (now sponsoring nearly every possible keyword combination), FTD, and Blue Nile have all publicly groaned their PPC keyword rates have increased more than 50%. Blue Nile blames the PPC rate increase on "irrational behavior" and Blue Nile founder Mark Vadon cites Google AdWords keyword rate increases as the primary reason why his company missed its fourth quarter 2005 revenue projections.

Both Google and Yahoo/Overture have confirmed that their sponsored keyword rates are rising rapidly. The market frenzy and rush to sponsor keywords coupled with rising click fraud corruption is creating a complicated environment and trap-filled SEM lansdcape.

Consider implementation of an comprehensive organic search engine foundation that provides keyword exposure and brand consideration on the search engine results pages as in-depth pay per click research is conducted.

The most sucessful search engine optimization programs involve organic search engine optimization as the basis point and Pay Per Click as an additional layer that is dropped later to augment and compliant organic seo efforts.

Also keep in mind that searchers prefer the organic search results 6 to 1 vs. paid and long-term seo strength can only be accomplished through organic website optimization programs. Make sure that your website and content is open for indexing by the robot crawlers that determine the order of links on the results pages before becoming active in the Pay Per click "open auction" marketplace.