An essential part of being a good lawyer is spotting risk and taking the necessary steps to mitigate it. The same goes for the decisions involved in marketing a law practice. You need to evaluate alternative law firm marketing strategies and determine which ones offer the best return on investment with the least amount of risk.
This article takes a look at the growing problem of “click fraud,” a phenomenon that poses a risk to one of the most popular new forms of online marketing, “pay-per-click” advertising.
What Is Pay-Per-Click?
Pay-per-click (PPC) is that category of Internet advertising in which the advertiser pays for an ad placement only when someone clicks on the ad. Pay-per-click has become very popular with advertisers and search engines alike in recent years.
For advertisers, it provides unprecedented accuracy in determining just how many people actually saw an ad. As The Wall Street Journal observed,
For marketers accustomed to guessing whether consumers see TV spots and print ads, search ads have been a revelation.
For search engines, of course, pay-per-click provides revenue. This form of online advertising has now grown into a $4 billion business in the U.S.
What Is Click Fraud?
Click fraud is a term the search industry uses to describe anyone clicking on a pay-per-click ad with “ill intent.” Traditional paid ad placements which are billed at a flat monthly rate, are not susceptible to click fraud. That ill intent may be on the part of a website publisher seeking to generate unjustified revenue by arranging to have the ads on its own site clicked by people who are not potential customers.
Because the majority of the pay-per-click advertising revenue goes to the website that hosts the ad, this species of click fraud generates traffic in order to compel advertisers to pay for clicks that, in reality, have zero chance of giving them any business.
Click fraud can be perpetrated by people manually clicking on ads or, increasingly, by “hitbots,” automated software programs designed to click on PPC ads by the hundreds or thousands.
As reported in an April 17, 2005 story in the Washington Post, one website publisher has been sued by search giant Google for,
allegedly recruiting as many as 50 people to click online advertising, generating $50,000 in ad revenue. The self-clicking was ‘worthless to advertisers, but generated significant and unjust revenue for the defendants.’
Another, perhaps more sinister, form of click fraud is when a competitor clicks on the ads of its rival with the goal of costing the competitor money.
A front-page story about click fraud in the April 6 issue of The Wall Street Journal described just such a case.
In that episode, a charter jet company with a $20,000 per month budget for search ads discovered that a competitor was responsible for a substantial number of clicks to the company’s site.
Industry-wide, some experts estimate that the number of fraudulent clicks may range as high as 20% of the total for some websites.
How To Prevent it
Click fraud came to the public’s attention when George Reyes, the chief financial officer of Google addressed the issue during a conference in December of 2004.
He called click fraud “the biggest threat to the Internet economy.” He went on to say, “I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model.” Reyes’ comments raised awareness of what had been a little-known issue outside of the Internet search industry.
The major search engines Google and Yahoo have come under criticism for what some say is an inadequate effort to combat click fraud. The search engines contend that they are aggressively addressing the problem and that filters and traffic analysis help minimize losses to advertisers.
In addition, they note that they regularly provide refunds to customers when they determine that fraudulent clicks have gotten through. Ironically, it’s often the refund checks that give search engine customers the first inkling that something is amiss.
What does all this trouble in the Internet search industry mean to law firms?
For some, it means increased business, as advertisers and search engines try to make themselves whole after being bilked by those who prey on the vulnerabilities of the system.
For lawyers and law firms inclined to try pay-per-click advertising in spite of the risk, a simple note of caution is in order. Pay-per-click advertising is here to stay.
As with any new business, there are bound to be difficulties and unforeseen problems. And with so much at stake, companies like Google and Yahoo can be expected to muster whatever resources are necessary to address a problem that “potentially threatens [their] business model.”
The Bottom Line
Law firms need not avoid pay-per-click advertising, but they should be aware of the hazards. They should be alert to discrepancies between the number of clicks they pay for and the number of clients they expect those clicks to deliver.
Those who rely heavily on pay-per-click advertising should both watch carefully and consider diversifying their Internet ad dollars into online venues that are less vulnerable to the new breed of Internet scam artists.