Pay Per Click (PPC) Search Engine Click Fraud and PPC Bid Reset

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Pay Per Click (PPC) Search Engine Click Fraud and PPC Bid Reset

While no one can agree on how large a problem PPC click fraud is, everyone agrees that it IS a problem, so why don't we do something about it? Maybe a nationwide bid reset would help?

By Chris Nielsen
Minneapolis, MN - 03/04/2005 - While making toast this morning, I suddenly had this great idea for sending a strong message to PPC search engine providers that click fraud not only needs to be one of their top priorities, they also need to effectively reduce this problem to near-zero levels.

While I am sure many have fairly effective anti-fraud methods, advertisers can tell that fraud generally makes PPC advertising costly and ineffective for many unless you have the budget to sustain the losses, and staff that can monitor the system and make adjustments as needed.

Providers need to realize that while they are in the middle between advertisers and affiliate site results providers, they need to make advertisers their #1 priority. They need to keep the affiliates honest as a basic responsibility to their customer, the advertiser.

Some providers get this and some do not. When you are talking about the kind of money involved, it's easy to get distracted and not put your full effort into control of the problem. Dishonest affiliates are also pretty darn clever for the most part. This makes the problem very difficult to discern.

Pay per click bids have been spiriling upwards, and in some cases, at a dizzying rate. $90 a click is no longer a shock anymore. But is it really nessecary to have bids at that level? In many cases the distance between the top biddres and the average seems excessive. Part of this is a lack of understanding of proper PPC bidding techniques, and part is the fact that some seem to have a bottomless advertsing budget.

So the proposal I have is a simple one and it addresses two problems:

1) The PPC search engine providers need to understand that this has gone on long enough and needs to seriously be addressed, even at the expense of short term losses by search affiliates. They may also want to research if a method of sharing affiliate click data accross sites will help to uncover those committing fraud. And most clients would be very happy to assist the PPC sites with providing information and hosting code that can be used to indicate where fraud is being committed. A simple look in a site's log files can reveal many clues about this kind of activity.

2) PPC bid prices should periodicly be "adjusted" or normalized. This would reduce the gap between biders and level the playing field. Top bidders are still going to be on top, but they and eveyone else would then be paying less for the same results.

The action that I propose will not work unless widely adopted, and I realize that. I also realize that many will not bother with trying it.

The poposal is called PPC Bid Reset, that once a month on the last business day, all PPC bid accounts have all bids set to the minimum amount. This would be maintained for 24 hours, and then bids could be increased as needed.

The result should be a dramatic loss in revenue for the PPC systems and their affilates for a 24 hour period. Once the bidding resumes, most bidders will realize a cost savings as bids are increased, even if they soon return to their former levels. There will be a time when they are paying less for the same positions they had before.

The initial date for for the first PPC bid reset, is July 29th, a Friday. This will allow the bids to be reduced over a weekend in many cases and restored on the following Monday. A slow period for many advertisers, but also a long enough period to make sure the change is noticed, althought I would not expect any of the PPC providers to let us know what the effect was.

03/07/05 Looks like the media is finally heating up on this issue...