Every PPC advertiser in the paid social and paid search space is familiar with click fraud, often referred to by the broader term “invalid clicks”. These invalid clicks are originating from deliberate click fraud schemes, malicious competitors looking to drain your ad budgets, click-farms, cyber attackers, web crawlers, scrapers, proxy users and more. There is no doubt that advertisers are losing major ad-spend, as the scope and scale of click fraud is constantly on the rise.
But the direct losses caused to PPC campaign ad-spend are just the tip of the Iceberg. The greater damage occurs down the line, when invalid users merge into your audiences and CRM, wreaking havoc on your entire marketing operations and leading to even greater losses of ad spend. In this blog post, we walk you through the damage done when click fraud is allowed to run rampant.
To Start, Click Fraud is Directly Costing Advertisers 14% of Their Ad Spend
A recent study by Professor Roberto Cavazos of the University of Baltimore, found that 14% of all ad-clicks are completely invalid. This varies from industry to industry, with some verticals suffering from up to 30% invalid click rates. When advertisers are contemplating a plan to prevent click fraud, they usually look at these figures as the benchmark for how much ad-spend they could be losing. Obviously, losing 14% of your ad spend to completely invalid users is something everybody wants to prevent. It’s kind of a no-brainer.
But That’s Just the Tip of the Iceberg. The Big Money is Lost When You Start Remarketing to These Fake Users
Advertisers might as well wish they only lost 14% of their spend to click fraud. Those are just the direct, immediately measurable costs of invalid click activity. The real “fun” begins when these fraudulent, invalid, non-human users are left unchecked. After all, every user that visits your site and landing pages will ultimately end up in your retargeting audiences, where you will spend big money on serving them countless ads over the course of weeks, maybe even months. It’s hard to even begin to calculate those losses, but just imagine that at least 14% of your remarketing spend was also lost to click fraud. Furthermore, consider that fake users are typically more engaged than regular users, displaying higher click-through-rates, filling out forms and performing other sophisticated actions. As a result – advertisers actually spend more in remarketing to bots than to real human users, because of this engagement bias. Anyhow, it’s a mess.
And Remember Those Lookalike Audiences You Love to Target? Now Imagine They’re Modeled on Fake Bot Users
When we say that click fraud “infects” your marketing operations, we mean that it undermines everything you do. Think for example about lookalike audiences, a tool used by advertisers to expand their reach to more potential customers. When click fraud runs rampant and fake users end up in your audience pool, you are inevitably building lookalike audiences based on non-human, fraudulent traffic. Not only are you compromising the accuracy of your targeting and the quality of your traffic, but you’re actually inviting more fraud to come knocking at your door.
Also, Consider All That Time Spent Trying to Figure Out Why Your Conversion Numbers Don’t Add Up
Just think for a moment about all those countless hours spent every month by marketers, trying to figure out why their numbers make no sense? Who hasn’t scratched their heads wondering why they’re getting great reach, excellent CTR’s and even form fills, only to see a serious drop-off when it comes to actual conversions? The frustration, the time spent investigating your funnels, A/B testing landing pages, changing ad copy and spending more money on campaigns and analytics in an attempt to make things right. Significant exposure to invalid clicks can drive a marketing team crazy, wasting serious company resources and money while marketers try to figure out what’s run.
Oh, And Have You Ever Wondered What Happens When Fake Users Infiltrate Your CRM?
While the damage to traffic quality and the inevitable loss of ad spend is plainly obvious in the case of click fraud, what’s not so obvious is how invalid users infect your CRM. Fake users, just like real ones, end up in the advertiser’s CRM, causing all kinds of headaches and wasting the valuable time and energy of your sales teams who spend hours following up with bogus leads while trying to make sense of the data.
With Click Fraud Running Rampant, Advertisers Must Get Proactive About it
We’re currently witnessing a paradigm shift in PPC ad buying. Advertisers are now just starting to grasp the true scale and direct cost of click fraud, while also beginning to understand that a healthy marketing operation cannot run on invalid clicks. The losses are too great, the wasted remarketing spend is almost incalculable at times, the lookalike audiences are compromised, and the CRM becomes cluttered with fake users. Advertisers need to approach click fraud by cleansing their systems of the bad stuff, otherwise the entire operation is at risk.
To find out more about eliminating click fraud across your business, see the award-winning CHEQ For PPC.