To paraphrase Winston Churchill’s famous quote on democracy: Cost per Click (CPC) is the worst form of advertising, except for all of the others that have been tried.
CPC is a beautiful concept- instead of merely paying for impressions (as in the traditional CPM model), advertisers are paying for performance based on how many times people click on their ads. Advertisers can easily track campaign performance, optimize on the fly, and sleep soundly knowing that they won’t exceed their marketing budget.
However, anytime there is a great idea worth billions of dollars, unscrupulous types will try to game the system. In the CPC market, the leading form of misconduct is known as click fraud.
One recent example of click fraud involves GoodGoogle, a hacker (or group of hackers) based in Russia who trolls online forums offering to make competitors’ Google ads disappear. GoodGoogle achieves this by using a botnet (computers that have been hjacked to repeatedly perform simple actions, like clicking an ad), as well as advanced algorithms to enable the individual bots to fly under Google’s anti-fraud radar.
GoodGoogle directs the bots at advertisements targeted by its client, repeatedly clicking on the ads. With Google AdWords, an advertiser specifies how much it will pay per click for a given keyword, as well as a total budget. Once that advertiser’s budget is met, Google will begin displaying ads from the second highest-bidder. Hence, by rapidly exhausting the #1 bidder’s AdWords budget, the #2 bidder can gain the top spot while paying a lower price.
Even after paying GoodGoogle its fee (in the form of BitCoin or other cryptocurrencies), a shady advertiser can lower their overall campaign cost with these tactics. It’s a fair assumption that a number of people have done this, since the service has been around since 2011.
At the time of writing,it is unclear whether GoodGoogle still exists (the reference article is from ~six months ago)- but if it does, I can’t imagine it will exist much longer. GoodGoogle has several Gmail addresses linked, and even advertised its services on YouTube, so Google should be able to identify and pursue the perpetrator(s). Further, the onus is on Google to preserve the integrity of the AdWords platform- if advertisers don’t trust that the clicks they are paying for are legitimate, the CPC model will collapse.