Google recently announced the global expansion of it's new PPA program available to select adwords advertisers. For those unfamiliar with this terminology, PPA means pay-per-action, also called CPA, cost per action. Participants pay for traffic delivered to their sites only when a specified action occurs e.g. white paper download, online registration, lead form completion, or an online purchase through a shopping cart. The CPA model has been used for many years by affiliate marketers through companies like Linkshare, Commission Junction, and DirectTrack.
There has recently been an increase in hype about the PPA model being a cure to click fraud which is prevalent with the cost per click (CPC) payment model. Through my experience with Direct Response Technologies, and now with Click Forensics, I can tell you that there is no simple cure to click fraud. Fraudsters make their living committing all sorts of online fraud. The actions required and payment model has very little influence over fraudster behavior – especially when it comes to stopping their behavior – fraudsters do not stop, they adapt.
The fact is that CPA types of fraud can be difficult to catch and trace back to the lead source. For example, to catch a fraudulent lead, the merchant would need the ability to track the particulars about the lead, trace that specific lead back to a paid search advertisement from a specific date and time, and then notify the search engine before payment for that lead has been tendered. The problem is that fraud in transactions can take weeks or months to detect because until a marketer or sales person attempts to contact the lead, the lead can quite easily appear to look valid. And, in the case of retail transactions, an increase in chargebacks may signal PPA click fraud activity.
The best approach to detect and mitigate click fraud is to use a third party search engine auditing firm in order to validate online transactions of all kinds - clicks, visits, leads, sales, downloads, or whatever your metric of conversion is for you online ads.
To find out how click fraud is affecting your search advertising, you can join the click fraud network for a free diagnostic report: www.clickfraudnetwork.com
A recent article Lead Fraud (A Cousin of Click Fraud)--NetQuote v. Byrd illustrates a real world case of PPA fraud in action
Lori Weiman
Sr. Director of Product Strategy
Click Forensics