Click Fraud Blog
If Click Fraud is a Business Tax Then I Am Your Accountant.
March 18th, 2008
There has been an article doing the rounds for some time on the internet which says that click fraud should be treated as a business tax.  The article entitled Click fraud is just another business tax by Info Security Magazine talks about click fraud from an information security perspective and comes up with the premise that click fraud should be treated as an overhead on your PPC campaigns.Â
I would like to examine this idea and tell you why I think I am the accountant to get you a tax rebate.
One way people measure the return on investment for a pay per click campaign is to set a cost per acquisition level. This is a monetary amount which determines how many clicks a company is prepared to pay for, in return for a sale. An example would be a company selling an item for $49. They set their cost per acquisition level at $2.50.  Daily budget, max cost per click and other PPC variables are then adjusted to match this desired indicator. If click fraud is one of these variables, then so what ! It is accepted as long as the desired conversion levels at the set cost per acquisition are made. This is the business tax levy.
In I step as your accountant. It is estimate that the current click fraud tax rate is 16.6%, if I were able to get you a tax rebate and lower your cost per acquisition I am sure you would sit up and listen. Here is an example of the tax cut in action:
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If 16% of your clicks are worthless click fraud which will never convert and your cost per click is 0.05 then you can reduce you cost per acquisition by 40 cents per sale.
$2.50 / $0.05 = 50 * 16% = 8 *Â $0.05Â = $0.40
If you are selling 100,000 units a month at $49 that is a substantial saving of  $40,000 in your cost of acquisition bill.
How do I do this? I take copies of you web server logs files run them through my detailed analysis procedure and find incidents of click fraud for refund. I also find other low quality (but legitimate) click sources which can be excluded from you campaigns in the future to cut costs. Anyone interested in a review of their pay per click traffic for low quality clicks which increase the cost of client acquisition, please see my consultancy section.
I firmly belive in the tag line of this site, “only pay for quality clicks”. Clicks that have some change of conversion. I say don’t pay the tax, get in professional help to cut your tax liability.
I would like to end with an extract from the original article:
But right now, if you really can’t bear to pay a percentage to online scam artists, the best thing you can do is stay away from PPC advertising. Otherwise, think of it as a tax on your advertising budget. And like any tax, it’s best to get expert advice on how you minimize the bill.
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