Would you agree with the assertion that ad fraud sucks? Most advertisers who have been victimized by it probably would. But there is one particular group of advertisers for whom it sucks even more: those whose online advertising is primarily accomplished through Google. Why? Because of Google’s ad auctions.
Google’s main tool for selling online advertising is pay-per-click (PPC). It is a form of advertising that charges companies only when their ads are clicked on. Those ads can be displayed on Google’s search engine results pages (SERPs) or through the Google Display Network. Either way, ad auctions play an important role.
Ads Displayed on SERPs
The best way to understand how ad auctions influence ad fraud is to take a look at ads displayed on SERPs. These are the ads you see above and below organic results during a Google search. They even have the ‘Ad’ designation next to them.
How does Google choose the ads to display on SERPs? By combining the keywords chosen for visitor searches with the results of the ad auctions for those keywords. Google’s primary goal is to match the most appropriate ads to each and every search, thereby giving users access to the companies they are most likely to buy from.
How Ad Auctions Work
Google’s ad auctions are complicated, to say the least. They are based on the concept of advertisers bidding for keywords based on their value. The higher a company’s bid for a particular keyword, the more likely its ads will be displayed during relevant searches. Note that this is a very simplified explanation.
Google constantly tracks and analyzes keywords. Doing so is central to their business model. Each keyword for a particular topic is assigned a score. More valuable keywords have a higher scored and vice-versa. Scores are based on a scale from 1-10.
Scores are determined based on three types of relevance:
- The relevance of a keyword to a particular search query
- The relevance of a keyword to an advertiser’s ad group
- The relevance of a keyword to an advertiser’s landing page.
Again, this gets very complicated when you get into the details. But keeping things as simple as possible, Google combines keyword score with an advertiser’s bid to determine when and how frequently ads are displayed.
Enter Ad Fraud
Let’s move on to why ad auctions make ad fraud even worse for Google advertisers. Like any kind of auction, ad auctions can lead to advertisers paying too much for their most preferred keywords. Even when Google rewards a company’s quality score with lower PPC rates, the auction mentality can still lead to higher-than-necessary bids.
An ad fraud strategy built on the concept of generating fraudulent clicks to drive revenue works best when fraudsters are able to target the most expensive keywords. According to the makers of Fraud Blocker click fraud protection service, this sort of thing happens more often than most people realize.
An advertiser who gets caught up in ad auctions runs the risk of bidding too much. Excessively high bids result in higher marketing expenditures – even when all clicks on a particular ad are legitimate. But throw in ad fraud and those higher bids suddenly create a bigger problem.
Ad fraud is never good. Under any circumstance, it depletes marketing budgets and hurts competition. But ad fraud sucks even more for advertisers who rely primarily on Google Ads and its ad auctions model for PPC. Ad auctions open the door to wasting more money by bidding too aggressively on keywords ad fraudsters focus on.
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