One of my original suspicions about the increase in returns from our Google Ads was that someone out there was performing some sort of click fraud. Click fraud is “when a competitor, affiliate, or disgruntled employee creates fake traffic to a site through pay-per-click ads.” If you don’t know the business model for the Google Ads, essentially advertisers pay a fixed amount every time someone clicks on one of those text ads. The ads are targeted to a user and a page based on keywords that Google has deemed relevant to the content on that page. Advertisers bid on those keywords hoping to be the top or most prominent ad shown on a page.

For example, if you search on Google for Playstation, the ads that show up on the right are ranked by the amount each advertiser is willing to pay per click. The bids on very valuable or popular keywords can get into the hundreds of dollars. Fraudulent clicks, especially for popular keywords, can become an expensive liability for the victim.

As far as FatMixx is concerned, the revenue went up the day of the redesign launch. Moving the ads to the top of the page apparently got more people clicking on them. What’s weird and suspicious, though, is that another friend here started seeing his ad revenue go up at about the same time without a corresponding change on his part. It’s bizarre. I can’t think of a good reason to do a broad, spammer style attack on Google’s ads except to attack Google itself. Why do that?

This topic is coming up more and more, and I think it bears watching for those of us in the industry, especially. By the way, all those sponsored links you see on CNN.com, Weather.com, and even ESPN.com are all running on similar technology and business models. The links above give a good overview of the problem and the market. If you’re thinking about starting a web ad driven business, this is something that could significantly affect ad revenues.