You have seen them, those ads that appear with the search results when you type a keyword or phrase into the Google search box. That is keyword advertising. You have also seen news stories with certain words underlined. You mouse-over these words and ads appear. That is also keyword advertising. The idea is to target relevant ads to potential customers based on what those customers are looking for. For example, entering the word “sailing” brings up ads for Fairwind Sail Charters, Chicago Sailboat Charters, Chicago Sailing, and Pleasure Sails.

It seems very straightforward and effective, but there are a few things you should watch when you begin to plan your keyword advertising.

Keyword Squatting

You have worked hard to make your brand what it is and it is logical to want to use your brand as a keyword for your company advertising. The first thing to do is make sure that your brand is not someone else’s keyword. You can actually purchase keywords through a number of pay-per-click (PPC) advertising providers such as Google Adwords, and it has happened that companies have purchased the keywords for their competition in order to gain some marketing advantage. One such case involves the contact lens provider, 1-800-Contacts.

In January 2008, 1-800-Contacts filed a trademark infringement complaint against Lens-World for allegedly purchasing the keywords “1-800Contacts,” “1800Contacts” and “1 800 Contacts” for its online advertising. Lens-World was able to do this because, while Google, Yahoo and others forbid using the name of a competitor in the body of an ad, they permit the purchase of the competitor’s keywords.

This, of course, has created a tangled legal issue since the intent was clearly to divert people looking for 1-800-Contacts away from that company and over to Lens-World, yet the law is not clear on the subject. One would think that truth-in-advertising rules would apply, but in 2007, the US District Court for Eastern Pennsylvania, in the case of J.G. Wentworth SSC Ltd v. Settlement Funding LLC, found that, as a matter of law, the use of keyword-triggered ads and keyword metatags cannot confuse consumers if the resulting ads/search results don’t display the plaintiff’s trademarks. 1-800-Contacts has faced similar verdicts in the past, having lost previous suits. It also doesn’t help that the contact lens giant does the same thing to its own competition and that it fought legislation in Utah that would have outlawed keyword advertising on trademark terms.

What does this mean for your business? It means that you need to protect your brand. You need to be aware of the keyword ownership of your brand name and you need to buy it (and its variants) from your PPC provider before someone else does. As infuriating as keyword squatting is, there is little hope that the courts will do anything about it. Relief in this case will have to come from the legislature.

Click Fraud

From the other side of the coin, one of the great pitfalls of keyword advertising is click fraud. This is defined as a type of Internet crime that occurs when a person, automated script, or computer program imitates a legitimate user clicking on an ad for the sole purpose of generating a charge per click. The primary beneficiary of this is the advertising network and the primary victim is the advertiser who contracted to pay a certain amount per click to the network.

Another kind of click fraud comes from third parties who are not involved with the original pay-per-click agreement. These third parties include:

Competitors. The competition may do this to force the target to pay for all of the irrelevant clicks. They do this in order to weaken their target financially or eliminate their online ads.

Competitors of ad publishers may do this in order to frame a publisher. Since many publishers rely exclusively on advertising revenue, disrupting their relationships with their advertisers can be damaging enough to put the publisher out of business.

Malicious Intent. Much like vandalism, these cases are hard to handle since the perpetrator is often very difficult to find since their motives are many and varied and often include political and personal vendettas.

Well-meaning Supporters. There are times when some overly helpful friend of the publisher discovers that the publisher profits from clicked-on ads. When that happens, they try to be a help by going onto the publisher’s site or network and clicking on the ads. Of course, all those good feelings come to an end when the publisher is accused of click fraud.

You can avoid click fraud to an extent by making sure your keywords and phrases are as specific as possible and by writing your ads so that the headline and text mirror your keywords. Also, by studying your web logs from sources like WebTrends, you will be able to see what is happening when your ad gets clicked. According to Internet Marketing Consultant Mark Welch, here are some of the telltale signs of click fraud:

Abandonment. Every website has visitors who come to the home page, but then “abandon” the site to go somewhere else. Watch for significant variations in this rate by source.

Path Analysis. On most websites, there are “busy” and “unpopular” sections. For example, very few people read a website’s “privacy policy” or “about us” page, but many more people will click to view “closeouts” and “today’s special.” Most visitors view only one or a few pages at your site (hence an average visit of 1.7 pages is not bad), and very few view 10 or more pages during a session. If you discover that visitors from a particular source have a dramatically different pattern of activity, you need to pay attention.

Double-Click Activity. It is fairly common for a consumer to search for something on Google, visit an advertiser’s website, and then search again on Google and click again on the same advertiser’s site a few minutes later. This is a normal pattern of activity for someone who is “shopping around” or comparing prices, and it’s not unreasonable to pay two “per-click” fees for this. However, if two clicks come from the same visitor within a few seconds, there should be no charge for the second click, nor should there be any charge for a third or subsequent click.

“Echo” Activity. If you discover a consistent pattern in which the same search phrases are executed more often than “normal,” or in which multiple users follow the same unusual path through your site, it is possible that the “echoed” activity is from an automated “agent.” (This is one use for data from “spyware,” which installs itself uninvited on consumers’ computers, and records their keystrokes or web visits; the data can be sent to another computer where the same searches and clicks are repeated.)

Phrase Surges. Unsophisticated “click fraud” operations will flood a search engine with many requests for the same search term. For example, I might discover that normally, 10 percent of my traffic from search engines is associated with a search for “fromitz,” but then suddenly there is a huge surge in traffic through GleepSearch.com, of which 90 percent are searches for “fromitz.” Sometimes there are valid reasons — maybe Jay Leno made a joke about fromitzes and widgets — but often this is a sign of fraud.

Missing Data. Often, an increased rate of “missing data” (such as user-agent or referrer data) may reflect fraudulent activity.

Excess Foreign Traffic. In one case where I uncovered “click fraud”, more than one-third were from IP addresses in China, and 56 percent were from IP addresses in non-English-speaking countries. Only 44 percent of traffic came from English-speaking countries. This is an extraordinary pattern, when compared to typical traffic distributions.

The best way to deal with click fraud is to avoid it altogether. Do not use any pay-per-click (PPC) scheme. Instead, use a pay-per-action (PPA) scheme in your keyword advertising. The difference is that with PPA, there is no payment until the person who clicks on your ad actually performs an action, such as filling out an information form, or even making a purchase. Only then, after the visitor does something that you feel is valuable, can you be charged. —Charles Cooper