Should Your Startup Be Worried About Click Fraud (And What Can Be Done About It)?

by Startacus Admin

Concerned about click fraud and its impact on your startup's advertising? This guidance should help you address just that

The cost of advertising is higher than it ought to be. There are several good reasons for this, which we’ll explore to clarify why advertising budgets keep going up. Certainly, click fraud is the main one to be worried about but some steps can be taken to work through it. 

This article is here to offer some useful guidance for startups that discover their ad clicks aren’t adding up correctly.  

A Steady Rise in the Cost of Advertising

Back in the day, advertising used to be inexpensive. When Google first started, ad clicks cost mere pennies.

Few people were using the internet, clicking on adverts, or buying online yet. There were some early adopters, tech fans, and the like, but other than that, it was slow going. So, ad clicks were necessarily dirt cheap to account for their lack of viability and to attract offline advertisers into the world of online advertising. 

However, since this time, there’s been a steady adoption of the internet through improvements in smartphone and telecoms technology, and with a PC in many homes before that, online shopping has gradually become the norm. Along with this progress, we’ve seen a steady increase in the cost of advertising over the years too.  

Are Advertisers Getting Value for Money?

The thinking is that along with the rise in the cost per click has been the increase in acceptance of buying online with response rates improving and conversions going up as well. This has been true in so far as it goes, but advertising has also become far more complicated along the way. 

Now there are so many intermediaries with their hands in the pie that ads are pricey, and it’s not always the case that ad campaigns are profitable for companies. The ROAS (or return on what a company spends on online advertising) needs to be reasonable compared to sales, otherwise, online promotion just doesn’t make sense. 

Is Click Fraud at Fault for Poor Results?

Click Fraud is a situation where an advertisement is clicked maliciously. 

The idea is that a competitor (or someone hired to work on their behalf) is actively seeking out your company’s online advertisements. Unlike with offline billboards and other adverts, in the online world, they can click on your paid adverts many times during a campaign. As a result, the clicks get all used up and the performance is reduced because none of their malicious clicks led to a sale. 

The issue is known as Click Fraud within the online advertising industry. Companies like ClickGUARD look to eradicate it by seeking out situations where it seems clear that false clicks were generated to sabotage another brand’s ad campaign. They can collect data to confirm where there have been problems with ad clicks, to get it addressed by the ad network (Google or another one). 

How Big of An Issue is Click Fraud?

It does vary from one industry to another. Some feel that it’s so competitive a landscape that they have no choice but to act in a bad manner to injure a competitor rather than fight on a level playing field. 

It’s estimated that tens of billions of pounds are lost to click fraud on an annual basis. The estimate comes from Statista, which continues to track the problem closely for interested parties. However, for a single ad campaign, 10 to 30 percent of ad clicks may be unwanted, unnecessary, and sometimes fraudulent too. 

How Can a Startup Protect Itself?

With the increasing use of bot farms and AI, the threat from click fraud has never been greater. Worse still, given the higher cost per click in today’s market, the problem is larger in monetary terms compared to in years past. 

What’s needed is to use a specialist that’s well versed in examining ad campaigns, both as they unfold and after the fact in search of irregularities. Not unlike voter fraud in an election, click fraud with an ad campaign needs to be located, highlighted, and stamped out. 

What Action Can Be Taken?

Experts provide a service that investigates ad campaigns to determine if click fraud has occurred. Their findings can be forward to the relevant ad network for review. Through this effort, the ad network can reach their conclusion and choose to award a company with some of their ad spend back to use on a forthcoming campaign. 

Gone are the days when companies need to sit by and accept click fraud on their ad account. The good news is that it’s often possible to determine which companies are responsible because they often have their ad campaigns start once yours have ended. When this kind of thing happens repeatedly, then it’s a tell-tale sign that people in the trade look out for. 

Due to the good work of teams that review ad campaign data to root out malicious activities, it can avoid the advertising budget being excessively high. Even for startups that have yet to turn a profit and may not expect to do so shortly, it still serves to reduce the cash burn rate when advertising campaign costs are properly controlled.

 

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Published on: 6th November 2020