Zooming growth

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The newly born PPC industry has grown into an oversize hulk overnight. It's unknown how much of Yahoo's $5.3 billion 2005 revenues come from PPC, but some estimates peg it at about half. Virtually all of Google's $6.1 billion 2005 revenue came from PPC, which means — gasp — that the search engine raked in more advertising income than the top-ranked television network. Clearly, the ad world is changing.

As the industry has grown, click fraud has grown with it. Exactly how much click fraud goes on is impossible to know: No systematic study has yet been conducted.

"It's definitely something to be concerned about," says Jamie Low, president of Search Engine Marketing. But due to the lack of information about the problem, it's hard to combat. "Right now it's kind of the cost of doing business with paid search."

Jessie Stricchiola, who has become a leading expert on click fraud, explains that click fraud doesn't affect every advertiser equally. "Google might have 1,000 AdSense partners for one set of keywords, and only 500 AdSense partners for another set of keywords," she says. "But within that thousand, perhaps 99 percent are legitimate and sending good clicks, whereas in the 500, possibly 75 percent are sending bad clicks."

"You can't always compare niches and say this niche has more fraud than the other, because it's a volume vs. validity issue — it's difficult to quantify in that way."

Adding confusion to the issue, scammers now use advanced software to create fake clicks. This so-called clickbot software is getting ever more advanced. Clickbot software "presents one of the most difficult threats, because it's constantly adapting and trying to outsmart the filters," Stricchiola says.

An e-tailer who competes in a competitive market might be victimized by a competitor who's "developing some pretty high-end click software to generate clicks from all over the world that can't always be identified as 'invalid' or 'fraudulent,'" she says.

In some instances, click fraud is perpetrated by Web site owners who host PPC ads. Stricchiola points to the example of a small site owner who hosts PPC ads and wants to boost the commission on those ads. "He happens to be a hacker and an engineer, and he either buys or develops an application that, just under the radar, generates a good $1,000 of commission a day - which is nothing in the scope of overall traffic volume," she says.

"We have this nagging problem that's going to stay consistent as long as the industry's around," she says. "And as the industry grows, the problem will grow in rough proportion."

"It just so happens that the PPC advertising model is the biggest money generator on both sides, so it's most prone to this kind of thing. And we're at the stage where we get to figure out how the industry's going to deal with it."

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PPC has become a rage as something which is all over the internet pages and something that has contributed to make internet big . With the arrival of PPC advertising, a whole new industry providing services for PPC advertisers has come up. A new breed of consultants providing a range of services right from keyword optimization to copywriting have been working to push the PPC model ahead of other Internet advertising models like banners, pay-per-impressions, pop-ups, etc.PPC services are a billion industry in size, and with 85% of Internet users using search engines to locate products, the significance of this industry can be understood.