Monday, June 8th, 2009

Addressing Click Fraud

While certainly not a new issue, the New York Times covered click fraud recently and referred to an example from advertiser Cars.com. This article sparked some discussion at Undertone, mostly focused on whether our position as a “quality content network” helps protect us from click fraud. While our deep relationship with only top publishers does put us in good company, no publisher is immune to this problem. Certainly these publishers have better protection in place than many of those in the long tail, and we have additional protections in our ad serving system as well. Still, the problem persists.

I look at this problem a little differently. Being well aware that click based advertising like Google AdWords is a huge growth segment in the industry, I question the real value of the click itself. First and foremost, what nearly all advertisers want is for users to visit their site and interact with their brand. Whether that interaction is an actual purchase, signing up for a newsletter or simply playing an online game, it’s still about that interaction. Delivering clicks certainly is part of this process, but as a raw metric, the click is really meaningless. By way of example, there are sites that have click through rates that well exceed the industry norm, but if those clickers are all teenage gamers and you are advertising an investment opportunity, did the advertiser receive any real value?

Instead of driving a high volume of low value clicks, advertisers should truly be focused on the desired interaction they are looking to achieve. It is that action, and that alone, that should be used to measure the success of campaigns. In this model, purchasing on a CPM basis will drive the best results; assuming that your media partner has clear and measurable goals. Media partners running a CPM campaign with a CPA goal, for example, know that they can’t wastefully burn the impressions (even if they get paid for them) since the advertiser will not renew or, worse, will cancel if the CPA goal is not met. Therefore, the media partner works hard to drive the best performance toward the actual client goal rather than simply driving clicks.

Where this most combats click fraud is when the advertiser firmly believes that CPC is the success metric. In this case, buying the media as CPM and requiring a strict CPC goal is the way to go. The media partner still needs to drive the clicks the advertiser requires, but now there is no incentive for click fraud since there is no direct fee paid for the individual clicks.

Posted in: Ad Networks, Business by Jared Skolnick @ 11:30 am Permalink |  

The Undertone Blog - 2009.