Many small to medium-sized online businesses are forced to rely on pay-per-click advertisements on search engines as their prime method of gaining visitors and ultimately customers.
The sites such as Google, Miva (formerly Espotting) and Overture (part of Yahoo!) do offer an excellent proposition, place adverts for free on the keywords you want and are only paid when someone actually clicks on to your Website. You should be then able to tailor how much you are willing to pay by your "conversion rate", the percentage of people that make a purchase when they visit your Website.
The problem with advertising on a pay-per-click basis is that you actually have to pay when someone clicks, not just when they make a transaction. Some clicks can cost upwards of £8 if you are using keywords such as "loans", "casinos" and other high value terms. Therefore, you need to ensure that your conversion rate is high to ensure that you are not just throwing money down the drain.
Some users will just click on your link and then decide that they do not want to view your site, they may click on your link by accident or their browser may crash when they view your site. Either way, you still have to pay for that user, regardless of the fact that they were not of any real value to you or your business.
This problem is exasperated by what is termed as "click fraud", where people or programs - automated robots, or 'bots - click on your link in an attempt to defraud either or both you and the search engine.
Your competitors may choose to continually click on your links so that you exhaust your budget and stop advertising on the keywords he wants. Or he may simply want you to lose money. Indeed, the click fraudster need not be a competitor, it could be a disgruntled former employee, customer or simply an activist who may take offence at, say, a well-known international chain of burger restaurants advertising with keywords such as "healthy food".
There is a theory, though, that there is another type of click fraudster, someone who is an affiliate of the search engine and who will use a series of bots with different Internet addresses to click on particular links in order to generate revenue to their affiliate account.
Which ever click fraudster targets you, you will lose money. Trying to get a refund is never easy, but in this area of business, you would need more than a hunch and you would need to be able to prove that the clicks were not just from visitors who did not like your site.
Another fraudulent activity has been picked up recently, particularly targeting Google advertisers. On Google, the amount you pay is related to the percentage of views of your advert that result in a click, so that the more that people click your ad, the lower the per-click cost becomes.
Some advertisers create affiliate versions of the Google search engine (called Adsense), which allows you to exclude certain Websites. In this case, they exclude themselves. They then continually search for the keywords they are targeting but do not click on your ad, thereby inflating the total amount of searches for a keyword, and having the effect of making their click through rate higher (so costing them less) and making yours lower (and costing you more). The problem is that it’s almost impossible for an advertiser to prove that this is going on.
One final gripe is when other companies use your brand as a keyword and engage in so called "brand hijacking". For example, three competitors of mine bid against my brand, "QuickQuid". If my brand was say "ASOS" (As Seen on Screen), then I'd be protected, despite both of us having un-registered trademarks. But then Google seems to have one rule for the big guys and one for the little guys.
Article writer Benjamin Cohen is the founder of QuickQuid.com.
UKFast is not responsible for the content of external Internet sites.