What is Impression Fraud or "How Grinch Stole  Cindy Lou's better Web Site ROI" ?

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 Click advertisement 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 Protect 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. If you are using a web metrics product, ask your vendor if they have the ability to  upload your Ad words 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 look at alternate plans that are now available from Yahoo, MSN and Ask Jeeves.

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