PPC Fraud: Every Click Counts...Or Does It?

"Paid Internet advertising has soared in recent years, and it appears there's no end in sight for this trend. According to research by J.P. Morgan, spending on all forms of online advertising will reach $19.2 billion in 2007, with pay-per-click (PPC) advertising at Google, Yahoo and the other major search engines accounting for half, or $9.6 billion. eMarketer Inc. projects that the PPC industry in the U.S alone will grow to $29 billion by 2010. And, while PPC is growing as a business, studies show that PPC fraud is also on the rise, and that the issue is emerging as a primary concern for e-tailers."
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Click Fraud Red Flags
So, what's an e-tailer to do? Watch for the following warning signs:

• IP addresses for visitors that range all over the planet for a distinctively U.S. product or service are suspect, as are large numbers of visitors that leave the site within seconds of arriving.
  
• If your PPC campaign costs continue to increase while Web site sales remain flat, you should investigate.
  
• Be wary if an advertiser's conversion rates for PPC advertising are lower than that for organic, non-paid listings.
  
• Track costs to see if the cost-per-click for the advertisers' best performing key words have been continually rising. (Fraud allows online advertising programs to raise fees based on keyword popularity and the number of competing advertisers.)