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What is Impression Fraud or “How Grinch Stole Cindy Lou’s better Web Site ROI” ?

February 21st, 2010 | Tags: better Web, Cindy, Fraud, Grinch, Impression, Lou's, Site, Stole

Impression fraud is a special case of click fraud. The
prototypical impression fraudster is the competitor who resorts
to unfair means to gain an advantage. His primary motivation is
to reduce the ranking of his competitor, and then save himself
money by inserting his own ad at a lower rate. Another possible
motivation may be a hit-and-run operation(random act of
violence). Given the potentially devastating consequences it
could have on a person’s web site return on marketing
investment, it could even be a disgruntled employee.

To illustrate the mechanics and motivation of Let’s call this
individual Grinch. Assume that Cindy Lou(our protagonist) has an
advertisement for Christmas trees running on google ad words.
Cindy Lou’s Pay Per Clickadvertisement has been doing rather
well, getting a lot of click throughs. She doesn’t have to bid a
whole bunch to rank high on the sponsored links because the
position is a function of bid price and Click Through Ratio. She
is getting decent traffic through her PPC campaign. The traffic
is very focused, a large number of visitors end up converting.
The trees are moving off the lot and things are shaping up
rather fine. Grinch too has an advertisement running.
Unfortunately (for Grinch), his advertisement is not getting a
lot of clicks. In fact, his CTR is so dismal that he has to pay
ever increasing sums just to keep it displayed. His ROI is not
that great given his higher cost base for the PPC bid. He does
not like the fact that Cindy’s campaign is doing rather well.
Not one bit! So he does something devious.

Grinch toggles off his own PPC ads and then does a lot of
searches for keywords appropriate to Christmas trees. He
searches on google, and asks his friends to search too. Only he
never clicks on Cindy Lou’s ad. He runs his campaign for a few
days, and Cindy sees her CTR go down and she is at the bottom of
the heap. It’s now down to a level where Grinch sees a level
playing field and steps in toggling his PPC ad back on. Grinch
is suddenly back in business, while Cindy has to keep up
somehow. Remember, it’s almost November and she has to sell off
her trees rather soon. Anecdotal evidence suggests that the loss
from this activity may well run into thousands of dollars for
larger advertisers(maybe when Cindy Lou Trees Inc. goes
nationwide).

How to Prevent your Self from Impression Fraud?

For impression fraud to be effective it has to happen at
relatively high volumes(usually accompanied by a “traffic
spike”). The result will be lots and lots of impressions and a
very low CTR. Also, if its done for competitive reason, Grinch
may identify himself (if you are really keeping tabs on things)
because he has to switch his ads on and off. Reporting it to
Google immediately will help but will not get you any
compensation. Google will still charge you more money for ad
placement in a certain position. The impression fraud attack is
extremely insidious, because even though the consequences can
severely affect the return on investment ( ROI), Google’s
policies don’t allow refunds to take place.

The take home point is that you have to keep tabs on the
traffic, including traffic that is not getting to your site. It
is imperative for you to use a web metrics product on a
periodic(and frequent basis). A lot of times, we see people
invest in a log analyzer or even a hosted web metrics
application without devoting time and resources to get
actionable data. If you are limited in terms of resources, you
should be able to set alarms through your web analytics package
and should be able to receive alerts. Ask your vendor if they
have the ability to upload your AdWords data into your web
metrics account. You have to reconcile the data from what your
historical CTR has been to your current CTR, and your costs. It
will help to level the playing field, calculate your effective
ROI, and may even allow you to compare google with competing
services available from Yahoo, MSN and Ask Jeeves.