Sunday, March 09, 2008

Adwords criminal click fraud

The losses from "Internet Indigents" may be heralding the demise of web advertising, a multi-billion dollar a year industry.

Now that the poor and ignorant have access to the Internet, all of the major search engine companies are feeling the heat.

Click fraud, scams and adwords deception have become the norm, and anyone who is considering advertising with paid clicks needs to know that the Internet Indigents will eat-up more than half of their advertising budget.

Consultants who study online advertising estimate that 10% to 15% of ad clicks are fake (deliberate click fraud), running up a tab of over $1 billion each year. However, when you consider the Internet Indigent, idiots mashing hyperlinks for fun and profit, the real figure is closer to five billion dollars a year.

At long last, we are seeing the market voting “No Confidence” in paid ad clicks.

Google stock fell 4.7%, amid concerns over the future viability of paid adwords hits the market and I believe that’s it’s largely due to the nasty “Internet Indigents”, poor, ignorant web surfers who clog forums with idiotic questions, stalk and harass people, and make themselves feel powerful by clicking paid adwords to cheat their business competitors. Businessweek confirms my own statistics that the vast majority of the “Internet Indigent” are foreigners, often uneducated and poor, but they all share low moral values and greed to rip-off businesses with fake ad clicks:

“Over the past three years, he has noticed a growing number of puzzling clicks coming from such places as Botswana, Mongolia, and Syria.”

Foreign Fraudsers love earning cash from paid ads

Wired notes that the click fraud is big business, and much of the stealing has been automated with foreign botnets:

“The FBI recently reported that botnets – which are used to facilitate crimes, such as spam, identity theft, denial of service attacks, phishing, spyware distribution and now click fraud – have infiltrated more than 1 million U.S. computers".

This map show the relative amount of click fraud by country. Note the high click fraud in third-world areas (Europe, China, Pakistan and Australia):

Internet indigents are the scourge of the web, one of the primary reasons that the web is becoming a dictatorship of idiots. Today, any jackass can label themselves an “expert”, regardless of their qualifications. In the database arena, I’ve seen loads of “fake” experts, people who put-up a front as an expert, yet refuse to publish their resume, lest people know that they are not what they appear to be.

Rednecks should be prohibited from clicking on paid advertizing

In fact, the whole pay-per-click auction model that Google pioneered is fraught with flaws. This study by ComScore notes that the types of people who click on ads are not the kind of people with the disposable income to buy your products and services. Over half of an online advertising campaign being spent on “Internet Indigents”, lower-class, blue collar surfers who earn less than $40k/year, and click like mad on paid ad clicks:

“The study illustrates that heavy clickers represent just 6% of the online population yet account for 50% of all display ad clicks. While many online media companies use click-through rate as an ad negotiation currency, the study shows that heavy clickers are not representative of the general public.

In fact, heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage”

Can Click Fraud be stopped?

Even the all powerful Google has not developed the technology to thwart the Internet Indigent, and they steal advertising dollars with free abandon.

"It's not that much different from someone coming up and taking money out of your wallet," says David Struck. He and his wife, Renee, both 35, say they dabbled in click fraud last year, making more than $5,000 in four months.

Employing a common scheme, the McGregor (Minn.) couple set up dummy Web sites filled with nothing but recycled Google and Yahoo advertisements. Then they paid others small amounts to visit the sites, where it was understood they would click away on the ads, says David Struck. It was "way too easy," he adds.”

There are also cases of unscrupulous and struggling competitors who use paid adwords to try to siphon-off legitimate searches for their competition. See here, when you search for the keyword “Burleson”:

One promising tool is the Google adwords by zip code, where you can target your ads to neighborhoods with less poor and immoral people.

Another possibility is a tool to detect when an internet indigent is behind the keyboard, perhaps a body odor meter attached to the PC: