Click Farm

A click farm is a form of click fraud, where a large group of low-paid workers is hired to click on paid advertising links for the click fraudster (click farm master or click farmer). The workers click the links, surf the target website for a period of time, and possibly sign up for newsletters prior to clicking another link. For many of these workers, clicking on enough ads per day may increase their revenue substantially and may also be an alternative to other type of works. It is extremely difficult for an automated filter to detect this simulated traffic as fake because the visitor behavior appears exactly the same as that of an actual legitimate visitor.


Filtering
Pay per click providers including as Google, Yahoo!, and MSN have made substantial efforts to combat click fraud. Automated filters remove most click fraud attempts at source. In effort to circumvent these filtering systems, click fraudsters have begun to use these click farms to simulate actual visitors.


Method

The first method is by hiring competitor fraudsters to deplete the advertising budget of the competitor so that they will be able to have their ads shown in higher pay per click rankings at a lower cost. In this case, the competitor is weakened instead of being outbid in the pay per click bidding system. The investment on the click farm made by the fraudster is only a very small fraction of the amount lost by the competitor.

The second method is by hiring the click farm workers to click on the click farmer's own ads. This way, the money lost by the advertisers is gained by the click farmer rather than by the search engines and content networks like it is in the first method.

Clicktag

Click tag code as specified by Adobe.

A click tag is a parameter used in Flash banner ads. The parameter is a variable that defines the destination URL from the markup code. By using a click tag, the advertiser can easily see and modify the URL without a Flash developer.
The click tag enables the ad serving network to gain metrics such as the amount of clicks and views or which sites these clicks and views have been made. By reading the data gained by the click tag parameter, an advertiser can evaluate how effective the ad campaign has been.




variation

There are no industry standards on how to program a click tag. The code for the programming is case-sensitive, but programmers format their capitalization differently so ad serving networks may require clickTAG, ClickTag, clickTag, or any variation of capitalization for that specific variable.
Some ad serving networks may also require the ad's programmer to specific the level or strata the advertisement directs to such as the Google click tag requirements. Other ad serving networks such as Myspace do not require root level specification.
Ad serving networks may also require protocol specification by forcing the URL to begin with "http:" as a security measure advised by Adobe. Adobe warns that a malicious website could source the banner and pass a URL that begins with "javascript;" or another pseudo-protocol creating a hole for malicious scripts. This would allow someone access to the site's data, cookies, or can perform actions on behalf of the website where the ad is placed.
Click tags also vary depending on the version of Flash or Actionscript used.

Click Fraud

Click fraud is a type of Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.
Use of a computer to commit this type of Internet fraud is a felony in many jurisdictions, for example Penal Code 502 in California, USA.  There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a competitor's advertising budget



Pay per click advertising
Pay per click advertising or, PPC advertising, is an arrangement in which webmasters (operators of Web sites), acting as publishers, display clickable links from advertisers in exchange for a charge per click. As this industry evolved, a number of advertising networks developed, which acted as middlemen between these two groups (publishers and advertisers). Each time a (believed to be) valid Web user clicks on an ad, the advertiser pays the advertising network, who in turn pays the publisher a share of this money. This revenue-sharing system is seen as an incentive for click fraud.
The largest of the advertising networks, Google's AdWords/AdSense and Yahoo! Search Marketing, act in a dual role, since they are also publishers themselves (on their search engines). According to critics, this complex relationship may create a conflict of interest. For instance, Google loses money to undetected click fraud when it pays out to the publisher, but it makes more money when it collects fees from the advertiser. Because of the spread between what Google collects and what Google pays out, click fraud directly and invisibly profits Google




Organisation
Click fraud can be as simple as one person starting a small Web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Often the number of clicks and their value is so small that the fraud goes undetected. Publishers may claim that small amounts of such clicking is an accident, which is often the case.

Much larger-scale fraud also occurs. Those engaged in large-scale fraud will often run scripts which simulate a human clicking on ads in Web pages. However, huge numbers of clicks appearing to come from just one, or a small number of computers, or a single geographic area, look highly suspicious to the advertising network and advertisers. Clicks coming from a computer known to be that of a publisher also look suspicious to those watching for click fraud. A person attempting large-scale fraud, alone in their home, stands a good chance of being caught.
One type of fraud that circumvents detection based on IP patterns uses existing user traffic, turning this into clicks or impressions. Such an attack can be camouflaged from users by using 0-size iframes to display advertisements that are programmatically retrieved using JavaScript. It could also be camouflaged from advertisers and portals by ensuring that so-called "reverse spiders" are presented with a legitimate page, while human visitors are presented with a page that commits click fraud. The use of 0-size iframes and other techniques involving human visitors may also be combined with the use of incentivized traffic, where members of "Paid to Read" sites are paid small amounts of money (often a fraction of a cent) to visit a website and/or click on keywords and search results, sometimes hundreds or thousands of times every day. Some owners of PTR sites are members of PPC engines and may send many email ads to users who do search, while sending little ads to those who do not. They do this mainly because the charge per click on search results is often the only source of revenue to the site. This is known as forced searching, a practice that is frowned upon in the Get Paid To industry.
Organized crime can handle this by having many computers with their own Internet connections in different geographic locations. Often, scripts fail to mimic true human behavior, so organized crime networks use Trojan code to turn the average person's machines into zombie computers and use sporadic redirects or DNS cache poisoning to turn the oblivious user's actions into actions generating revenue for the scammer. It can be difficult for advertisers, advertising networks, and authorities to pursue cases against networks of people spread around multiple countries.
Impression fraud is when falsely generated ad impressions affect an advertiser's account. In the case of click-through rate based auction models, the advertiser may be penalized for having an unacceptably low click-through for a given keyword. This involves making numerous searches for a keyword without clicking of the ad. Such ads are disabled automatically, enabling a competitor's lower-bid ad for the same keyword to continue, while several high bidders (on the first page of the search results) have been eliminated.

Clickthrough rate

Clickthrough rate or CTR is a way of measuring the success of an online advertising campaign.
The CTR for an ad is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage.
For example, if a banner ad was delivered 100 times (100 impressions) and received one click then the CTR would be 1%.
Banner ad click-through rates have fallen over time; when they first started to appear, it was not uncommon to have rates above five percent. They have fallen since then, currently averaging closer to 0.2 or 0.3 percent. In most cases, a 2% click-through rate would be considered very successful, though the exact number is hotly debated and would vary depending on the situation. The average click-through rate of 3% in the 1990s declined to 0.28% by 2003. Since advertisers typically pay more for a high click-through rate, getting many click-throughs with few purchases is undesirable to advertisers. Similarly, by selecting an appropriate advertising site with high affinity (e.g. a movie magazine for a movie advertisement), the same banner can achieve a substantially higher CTR. Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through rates than standard banner ads, however overly intrusive ads are often avoided by viewers.

Ad serving

Example for ad serving

Ad serving
Ad serving describes the technology and service that places advertisements on web sites. Ad serving technology companies provide software to web sites and advertisers to serve ads, count them, choose the ads that will make the website or advertiser most money, and monitor progress of different advertising campaigns.

Overview

An ad server is a computer server, specifically a web server, that stores advertisements used in online marketing and delivers them to website visitors.

The content of the webserver is constantly updated so that the website or webpage on which the ads are displayed contains new advertisements -- e.g., banners (static images/animations) or text -- when the site or page is visited or refreshed by a user.

In addition, the ad server also performs various other tasks like counting the number of impressions/clicks for an ad campaign and report generation, which helps in determining the ROI for an advertiser on a particular website.

Ad servers come in two flavors: local ad servers and third-party or remote ad servers. Local ad servers are typically run by a single publisher and serve ads to that publisher's domains, allowing fine-grained creative, formatting, and content control by that publisher. Remote ad servers can serve ads across domains owned by multiple publishers. They deliver the ads from one central source so that advertisers and publishers can track the distribution of their online advertisements, and have one location for controlling the rotation and distribution of their advertisements across the web.

Ad server functionality

The typical common functionality of ad servers includes:

• * Uploading advertisements and rich media.
• * Trafficking ads according to differing business rules.
• * Targeting ads to different users, or content.
• * Tuning and optimization based on results.
• * Reporting impressions, clicks, post-click & post-impression activities, and interaction metrics.

Advanced functionality may include:

• Frequency capping so users only see messages a limited amount of time. (Advertisers can also limit ads by setting a frequency cap on money-spending)
• Sequencing ads so users see messages in a specific order (sometimes known as surround sessions).
• Excluding competition so users do not see competitors' ads directly next to one another. (Usually done by bidding on keywords)
• Displaying ads so an advertiser can own 100% of the inventory on a page (sometimes known as Roadblocks).
• Targeting ads to users based on their previous behavior (behavioral marketing or behavioral targeting).
• Targeting specific IP-addresses i.e. targeting specific individuals or companies

Ad targeting and optimization

One aspect of ad serving technology is automated and semi-automated means of optimizing bid prices, placement, targeting, or other characteristics. Significant methods include:

Behavioral Targeting - Using a profile of prior behavior on the part of the viewer to determine which ad to show during a given visit. For example, targeting car ads on a portal to a viewer that was known to have visited the automotive section of a general media site.

Contextual Targeting - Inferring the optimum ad placement from information contained on the page where the ad is being served. For example, placing Mountain Bike ads automatically on a page with a mountain biking article.

Creative Optimization - Using experimental or predictive methods to explore the optimum creative for a given ad placement and exploiting that determination in further impressions.

Pay Per Click

Pay per click (PPC) (also called Cost per click) is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher (typically a website owner) when the ad is clicked. With search engines  advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. PPC "display" advertisements are shown on web sites with related content that have agreed to show ads. This approach differs from the "pay per impression" methods used in television and newspaper advertising.
In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, PPC implements the so-called affiliate model, that provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model: If an affiliate does not generate sales, it represents no cost to the merchant. Variations include banner exchange, pay-per-click, and revenue sharing programs.
Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser's keyword list, or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to or above organic results on search engine results pages, or anywhere a web developer chooses on a content site.
Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the three largest network operators, and all three operate under a bid-based model.
The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems to guard against abusive clicks by competitors or corrupt web developers.

Determining cost per click

There are two primary models for determining cost per click: flat-rate and bid-based. In both cases the advertiser must consider the potential value of a click from a given source. This value is based on the type of individual the advertiser is expecting to receive as a visitor to his or her website, and what the advertiser can gain from that visit, usually revenue, both in the short term as well as in the long term. As with other forms of advertising targeting is key, and factors that often play into PPC campaigns include the target's interest (often defined by a search term they have entered into a search engine, or the content of a page that they are browsing), intent (e.g., to purchase or not), location (for geo targeting), and the day and time that they are browsing.

Flat-rate PPC

In the flat-rate model, the advertiser and publisher agree upon a fixed amount that will be paid for each click. In many cases the publisher has a rate card that lists the CPC within different areas of their website or network. These various amounts are often related to the content on pages, with content that generally attracts more valuable visitors having a higher CPC than content that attracts less valuable visitors. However, in many cases advertisers can negotiate lower rates, especially when committing to a long-term or high-value contract.
The flat-rate model is particularly common to comparison shopping engines, which typically publish rate cards. However, these rates are sometimes minimal, and advertisers can pay more for greater visibility. These sites are usually neatly compartmentalized into product or service categories, allowing a high degree of targeting by advertisers. In many cases, the entire core content of these sites is paid ads.

Bid-based PPC

In the bid-based model, the advertiser signs a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or, more commonly, an advertising network. Each advertiser informs the host of the maximum amount that he or she is willing to pay for a given ad spot (often based on a keyword), usually using online tools to do so. The auction plays out in an automated fashion every time a visitor triggers the ad spot.
In addition to ad spots on SERPs, the major advertising networks allow for contextual ads to be placed on the properties of 3rd-parties with whom they have partnered. These publishers sign up to host ads on behalf of the network. In return, they receive a portion of the ad revenue that the network generates, which can be anywhere from 50% to over 80% of the gross revenue paid by advertisers. These properties are often referred to as a content network and the ads on them as contextual ads because the ad spots are associated with keywords based on the context of the page on which they are found. In general, ads on content networks have a much lower click-through rate (CTR) and conversion rate (CR) than ads found on SERPs and consequently are less highly valued. Content network properties can include websites, newsletters, and e-mails.

Advertisers pay for each click they receive, with the actual amount paid based on the amount bid. It is common practice amongst auction hosts to charge a winning bidder just slightly more (e.g. one penny) than the next highest bidder or the actual amount bid, whichever is lower. This avoids situations where bidders are constantly adjusting their bids by very small amounts to see if they can still win the auction while paying just a little bit less per click.
To maximize success and achieve scale, automated bid management systems can be deployed. These systems can be used directly by the advertiser, though they are more commonly used by advertising agencies that offer PPC bid management as a service. These tools generally allow for bid management at scale, with thousands or even millions of PPC bids controlled by a highly automated system. The system generally sets each bid based on the goal that has been set for it, such as maximize profit, maximize traffic at breakeven, and so forth. The system is usually tied into the advertiser's website and fed the results of each click, which then allows it to set bids. The effectiveness of these systems is directly related to the quality and quantity of the performance data that they have to work with - low-traffic ads can lead to a scarcity of data problem that renders many bid management tools useless at worst, or inefficient at best.

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