Recently, advertisers have found the Cost Per Click (CPC) model extremely effective for increasing traffic to websites. With the CPC model, the ad is
Recently, advertisers have found the Cost Per Click (CPC) model extremely effective for increasing traffic to websites. With the CPC model, the ad is viewable to many; however, advertisers only pay for the number of clicks the ad receives. If you’re selling real estate, the CPC model sounds promising, right? Think about it! You pay for the clicks your ad receives, and those who click are (obviously) more likely to buy real estate!
However, CEO and President of Great Agent, Jasper Juhl warns businesses about a critical flaw in the CPC model. More importantly, how that flaw could potentially cause businesses to lose millions or go bankrupt.
Who commits click fraud and why?
Ads are visible more frequently and broadly than one would think. In fact, in exchange for commissions, affiliate networks display ads for google to increase the visibility and clickability of said ads.
Google’s affiliate network receives a commission that can be up to 60 percent of the CPC. Juhl suspects this is a huge incentive for affiliates to commit click fraud. Especially when there are google clients who pay $10 per click or more. These affiliates are essentially clicking the very own links they display on behalf of google to receive commissions in return. Thus, committing click fraud.
How prevalent is click fraud?
To illustrate the prevalence of click fraud, Juhl shares an analysis he conducted for three financial firms. Over a period of two years, he found evidence of up to $400 to $500 million worth of fraud.
Although affiliate fraud largely contributes to that number, competitive clicking is also a likely contributor. When an advertiser intentionally clicks on a competitor’s ad to deplete their CPC budget it is known as competitive clicking. In some cases, click fraud, whether competitive clicking or affiliate fraud, can be as high as 70 percent of traffic.
How to protect yourself from click fraud when selling real estate?
In many cases, the fraud is so sophisticated it’s difficult and costly to detect; sometimes it can take over six months and cost over $100,000. These organized criminals are particularly skillful; they create multiple accounts, mask their websites’ identities, use offshore accounts, and register various aliases to commit click fraud.
If you’re selling real estate and using the CPC model, it may be wise to hire professionals, like Great Agent, to combat click fraud or implement a different model altogether.
Great Agent includes a monitoring service for advertisers implementing a combination of proprietary software, a forensic security scanning program, and tracking technology to determine, as Juhl says, “what’s real and what’s not.”
As for the implications click fraud has on the CPC model, Juhl believes newer advertising models will be developed such as Cost Per Call or Cost Per Acquisition. Models which prove to provide results with more integrity than the CPC model.