What is Impression Fraud or “How the Grinch Stole Cindy Lou’s better Web Site ROI”?

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Impression fraud is a special case of click fraud. The prototypical impression fraudster is the competitor who resorts to unfair means to gain an advantage. His primary motivation is to reduce the ranking of his competitor, and then save himself money by inserting his own ad at a lower rate. Another possible scenario of impression fraud may be a hit-and-run operation (random act of violence). Given the potentially devastating consequences it could have on a website’s return on marketing investment, it could even be a disgruntled employee.

To illustrate the mechanics and motivation of impression fraud, let us take the example of “The Grinch,” a potential fraudster. Assume that Cindy Lou (our protagonist) has an advertisement for Christmas trees running on Google ad words. Cindy Lou’s Pay Per Click advertisement has been doing rather well, getting a lot of click through. She doesn’t have to bid a whole bunch to rank high on the sponsored links because her position is a function of bid price and Click Through Ratio.

Cindy Lou is getting decent traffic through her PPC campaign. The traffic is focused and a large number of visitors end up converting. The trees are moving off the lot and things are shaping up fine.

The Grinch, on the other hand, also has an advertisement running. Unfortunately for him, his advertisement is not getting a lot of clicks. In fact, his CTR is so dismal that he has to pay ever increasing sums just to keep it displayed. His ROI is not that great given his higher cost base for the PPC bid. He does not like the fact that Cindy’s campaign is doing well. Not one bit! So he does something devious.

The Grinch toggles off his own PPC ads and then carries out searches for keywords appropriate to Christmas trees. He searches on Google, and asks his friends to search too. Only, he never clicks on Cindy Lou’s ad. He runs his campaign for a few days and Cindy sees her CTR go down, until she is at the bottom of the heap. It’s now down to a level where the Grinch sees a level playing field. He takes advantage and steps in, toggling his PPC ad back on. The Grinch is suddenly back in business, while Cindy has to keep up somehow. Remember, it’s almost November and she has to sell off her trees soon. Things do not look good for her business. Anecdotal evidence suggests that the loss from this activity may well run into thousands of dollars for larger advertisers (maybe when Cindy Lou Trees Inc. goes nationwide).

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