If you see a sudden spike in clicks or impressions on your pay per click ads, it could mean that your latest campaign is working or it could mean that you are are experiencing click fraud. What should you do?

Well, first, try to find out why you are seeing a spike in click. The Yahoo! Search Marketing Blog recently reported that you could see a spike in clicks for any of the following reasons:

• Changes to an ad’s ranking in search results
• A change to the match type used for your ads
• Keyword seasonality
• A new distribution partner added to the Yahoo! network
• Yahoo! Buzz placement, where searches on certain popular keywords can be performed directly from the page content.
• Yahoo! Front Page placement, where searches on certain popular keywords can be performed directly from the page content

If a placement of your ad changes for any reason then you could see a spike in the number of clicks that you get. For instance, let’s say your number 1 competitor pauses his ads and that causes you to rise in your ranking a few places. That could increase the number of clicks that you are getting. You can always adjust your keyword bid temporarily until you see yourself suddenly decline then adjust them upwards again. But what if there is click fraud? What should you do?

Yahoo! has a Traffic Quality Center that lets you report sudden spikes and ask for an investigation. Their report will tell you why your clicks have suddenly gone up and you’ll be able to act accordingly. Each of the search engines has a similar service and all you have to do is report what you see and they’ll let you know what they see happening. Most likely, if you see a sudden rise in clicks, there is a logical explanation for it and it’s not always click fraud.

I’d have thought Google would have been the first to do it. But just when you least expect it, Yahoo! pulls a rabbit out of the hat and introduces a click filter report.

While the report doesn’t promise or aspire to solve or diminish click fraud, it does allow advertisers the opportunity to see how many of their clicks are being tossed out and which they won’t have to pay for. From the Yahoo! Search Marketing Blog:

Our Click Protection System works around the clock to identify clicks we believe you shouldn’t have to pay for—but until now, you had to take our word for it. Now you can use our new Click Filter Report to find out how many clicks we’re throwing out.

I say kudos to Yahoo! for this. Advertisers have been on all the search engines and pay per click providers for years now about click fraud. Finally, it looks as if one of the search engines is taking it seriously. I’d be curious to know if this new development increases Yahoo!s PPC business. My bet is, it won’t.

The reason you won’t say Google advertisers move over to Yahoo! for this report is because Google actually does a better job of providing advertisers with tools to make their ads more successful. They’ve figured out the pay per click game. And that’s why it’s surprising that they weren’t the first to come up with this report. I’m putting my money on Google introducing a similar service for Google AdWords some time in the near future. They’ll still be the market leader.

Will Yahoo!s $1 million lawsuit change anything for PPC advertisers? Certainly not if Andy Beal is right in his prediction.

Lawsuits such as this one usually take years to run their course - if they go all the way through to the end and a decision is made by a court. In a lot cases, they end before they get there and the litigants settle out of court. It is likely that Yahoo! will settle out of court as well. It won’t benefit them to let a judge decide the case as they will to disclose details about their advertising programs that they don’t want public. Google would play it the same way.

In fact, Google already has been the target of several lawsuits and each has ended with the same fate or looks as if they will. None of the PPC companies can afford to lose a judgment and none can afford for a competitor to lose. It would likely lead to legislation and regulation and nobody wants that. Settlement is better. The question is, How much will the parties settle for?

In the end, when it comes to click fraud, there are few alternatives for advertisers other than the course that Bigred has taken.

(Source) teaming up with Click Forensics in order to fight against click fraud may just prove to be a decision they will not regret. Advertisers will most likely appreciate their intention and, from that perspective, this partnership can be considered the second thing that Yahoo! has done right this week.

This is a good move on Yahoo!’s part. The first pay per click company to successfully reduce click fraud to manageable proportions will see a huge lift in their business overnight. Google doesn’t seem to be too serious about fighting click fraud. But Yahoo! partnering with one of the largest and most successful traffic quality businesses online does show a seriousness to address the issue head on. And if Yahoo! can successfully reduce click fraud and increase its profitability in that area then it certainly is possible that the company could double its cash flow within three years.

Understand, of course, that cash flow and profit are two different things. Reducing one’s debt can increase cash flow while reducing profit. So when Yahoo! says they will double their cash flow, it doesn’t mean that they will solve all of their financial problems. It just means that they will have more working cash with which to address those problems. Cash flow is very important for a business like Yahoo! because shareholders and potential investors look at that to determine the overall financial health of a business. And if Yahoo! can increase its cash flow it could attract more investors and better investors. That’s the first step to real profitability.

Search Engine Optimization Journal adds something new to the discussion about online newspapers.

The Online News Delivery model can introduce a whole new schemes of advertising. You could very well see the news brought to you by pay per action type ads, including audio and video as well as pay per click, along with display advertising. You’ll likely see a big rise in pay per thousand-view ads. But something else you might see is a sponsored article type advertising where a particular advertiser pays to sponsor an article or a series of articles.

The sponsored story is an interesting idea. Would it be flat fee or pay per click? I think it is quite possible it could work on either model, but I can see it moving toward a pay per click basis, which would give online newspapers and edge and provide advertisers will value that allows them to control their budgets. As time moves beyond the timeliness of the news story those links will get fewer and fewer clicks. At the same time, they will be relevant links.

Pay per click has been in a state of flux for a couple of years now so I’m not entirely married to the idea of the pay per click sponsored news story. But I do think the idea has a little merit. The problem will still be click fraud. How will newspapers prevent fraud, and will the search engines have a solution for it? It is likely that, if online newspapers control the advertising, click fraud solutions will have to come from them as well. But will it happen?

(Source) The latest Click Forensics report has arrived, and the company’s data doesn’t look at all encouraging; it states that the overall industry average click fraud rate in 2007’s fourth quarter was 16.6 percent.

Now, we know how this goes. Click Forensics says click fraud is up, Google says it’s not. There’s been a sort of running battle between the two for at least the past year. So, to be blunt, we’re not suggesting that you keep a printed copy of this report beneath your pillow.

Here we go again. Every quarter you hear the same old stories. Click fraud is up. No it’s not, says Google. Yes it is, say the critics. No, says Google. Then one of the other search engines, usually Yahoo!, says it is up, but just a little bit. Then Google says, No it isn’t. And the back and forth continues.

Facts: Click fraud has always been a problem. Click fraud always will be a problem. Some advertisers have a strong motive for saying click fraud is up. Pay per click providers have incentive for saying it’s not.

Who’s right? Probably neither. The truth is usually somewhere in the middle.

Click fraud is defined somewhat differently depending on who you ask, but in general click fraud is the practice of clicking on pay per click ads for erroneous purposes. This can include:

• To run down a competitor’s advertising budget
• To increase one’s income from AdSense and similar publishing programs
• To increase the performance of certain ads in order to make them appear more optimized and therefore increase quality score

Click fraud has many faces. It can be perpetrated by publishers trying to increase their revenues, by advertisers trying to increase their quality scores, and by third parties or competitors in order to drive advertisers out of the market. The problem with click fraud is it is sometimes difficult to detect. But if you think that you have been a victim of click fraud then you should report it to your pay per click provider. Be sure to give them solid reasons why you think you’ve been targeted with click fraud.