After last weeks report from Click Forensics stating that 17.1% of the clicks on pay-per-click advertisements last year were fraudulent, Google hit back by claiming that the real figure was less than 10% which probably means that it is 10%! Either way, this doesn’t sound like much of a convincing argument and click fraud is quite clearly a problem.
Any advertiser undertaking a PPC campaign faces a number of challenges. For most, it is hard enough to get consumers to click on your advert let alone do anything once they hit a landing page. Sophisticated marketers using PPC campaigns will be able to optimise and work out the exact return on investment from such activity but click fraud can put a spanner in the works.
As an example, if your objective as an advertiser is to collect contact details from a consumer when they have clicked on your advert and each record is worth £10 to you, then if a click costs £1 you need at least 1 in every 10 people that clicks to submit their information to make this cost effective. When you add click fraud into the equation then this could be the difference between success and failure.
Any advertiser using PPC marketing could potentially be adversely affected by click fraud whether it is 17.1% or indeed “less than 10%”. So the question is, what can you do about it? Well that’s an easy one – buy leads not clicks! Lead generation mitigates some of the advertiser’s risk as the lead provider will be absorbing additional costs such as click fraud.
As lead generation is one step closer to a converted customer than a click, it is much easier for an advertiser to plan their marketing campaigns because there are fewer variables and less risk. If we look at an example, say life insurance leads then the logic is fairly straightforward. A life insurance lead might cost £35 and on average you might convert 20% into business. For an insurance company buying leads they don’t have to worry about click fraud. The lead supplier absorbs the fraudulent clicks as they only sell leads and not “non-leads” (i.e. the fraudulent clicks). In addition, any reputable lead provider should allow the advertiser to return and get refunded for any invalid leads, i.e. wrong phone numbers, incorrect consumer details etc.
Ultimately, the question is in the current economic climate, where marketing budgets are being made to sweat, can advertisers still afford to pay for those fraudulent clicks?
Justin.Rees@LeadPoint.com
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