A Hard Look at PPC, Click Fraud and the Alternatives

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.

Where My Advertising Money Works Best

I have always gained the best bang for my buck with pay-for-placement advertising. In a nutshell, I pay a monthly, quarterly or yearly fee to have my advertising seen on various websites. Banner advertising is always an option, but text links provide better click-through rates (CTR's).

At any one time, you can find links to my websites on dozens of other websites.

Here are a few examples of pay-for-placement, often referred to as "paid inclusion", advertising networks:

ISEDN dot Org Network:

The Independent Search Engine and Directory Network (powered by ExactSeek dot Com) is comprised of more than 200 specialty search engines, search directories and article directories. Through their system, you can buy quarterly or yearly top ten exposure for specific keyword phrases which are then shown through the ISEDN's 200 plus member websites. Their network claims to show paid inclusion ads 150 million times per month.

Pricing starts at $4 per month per keyword phrase and goes down according to the number of keyword phrases purchased. Quarterly and yearly rates for one keyword phrase are $12 and $36, respectively.

BraveNet dot Com Home Page Featured Advertiser Listing:

BraveNet is the number one provider of free web tools in the world and through their AdBrite sales page you can purchase a 30 day text advertisement at the bottom of the Bravenet home page for $1500 or a 3 month advertisement for $3500. According to the Bravenet Media Kit, their network serves 500 million page views per month.

ColdFront dot Net Network:

ColdFront serves the Massive Multiplayer Online Role-Playing Games (MMORPG) communities. With 150,000 unique visits and 12 million page views per month, they provide real advertising value, if your target market happens to be in this area. Paid inclusion can be purchased for $250 to $350 per month.

Who Left The Barn Door Open

We put locks and deadbolts on our doors. In some localities, we put bars on our windows. We keep our valuables in safes. We keep our cars locked when we are not in them. We are a nation obsessed with protecting our valuables.

And yet, when we advertise our online businesses, we seem to be willing to let PPCSE providers steal 25% of our advertising budget It boggles the mind.

Personally, I am done with PPCSE companies until they can assure me that my advertising dollars are protected from click fraud.

I have always relied on my own search engine optimization skills to strengthen my natural search results. And frankly, I am pretty good at it.

And, to supplement my own SEO efforts and organic search result placement sucesses, or lack thereof, paid inclusion currently offers me the best value for my money.