In addition to tools offered by PPC Search Engines to eliminate "Bid Gaps", there are several third party Bid Management applications that will do trick. Atlas OnePoint offers a sophisticated Bid Management tool to effectively manage your bidding strategy across 40 different Pay Per Click Search Engines and shopping comparison sites. BidRank is another tool we recommend for optimizing keyword bids, and avoiding "Bid Gaps".

How You Can Profit From "Bid Gaps":

While creating "Bid Gaps" for your own keywords can be a costly mistake, you can often improve metrics of your Pay Per Click Advertising program by taking advantage of gaps that appear in bidding strategy of your competition.

Example:

Position # 1 $1.00 Position # 2 $ .79 Position # 3 $. 78 A "Bid Gap" has appeared between #1 and # 2 positions. You can either pay $1.01 to lock in #1 position, or bid $.80 for # 2 slot. Given these alternatives it may make more sense to opt for # 2 position. The slight decline in traffic from slipping to #2 spot may be more than compensated by improved ROI due to lower cost per click.

If you want to play hardball with your competitors by driving their cost per clicks higher, while locking in good positioning for your ads at a lower cost, you can manipulate 'Auto Bidding" tools to your advantage.

Example:

Position # 1 $1.00 Position # 2 $. 79 Position # 3 $. 78 In this example, if you used any of "AutoBid" features offered by many of Search Engines and set your maximum bid to $.99 ($.01 less than your competitor in #1 position), system would put you in # 2 position at $.80 ($.01 more than next highest bid), while your competitor would still have to pay $1.00 for # 1 slot (since system would consider your $.99 maximum bid to be next highest bid, and adjust your competitor's bid to be $.01 more). Software company Pay Per Click Management offers a "CompetitionBuster" feature specifically designed to take advantage of your competition's "Bid Gaps".

We don't necessarily endorse this approach, but Pay Per Click Advertising game isn't for faint of heart. You need to have a well thought out bidding strategy so you don't overpay for your clicks, while still getting traffic volume you need to reach your goals.

The Search Engines are in a unique position when it comes to Click Fraud. On one hand they benefit from it. The amount of revenue attributed to Click Fraud varies depending on who you ask, but everyone agrees that if illegitimate clicks were completely eliminated, all major Search Engines would suffer a significant hit to their revenues and stock prices. However, Search Engines also realize that long term health of industry depends on establishing trust with their advertiser base. Going forward we can expect to see Search Engines deploy increasingly sophisticated methods to eliminate fraud, and corresponding responses from dark side of Search Advertising industry.

Decreasing The Amount OF Click Fraud For Your Campaigns.

While it’s impossible to completely eliminate fraudulent traffic, there are some things you can do to increase percentage of good traffic from your investment in Pay per Click Advertising.

As a rule of thumb, more a Pay Per Click Ad network depends on affiliates for its traffic, more susceptible it will be to fraud. The reason why overall traffic quality is better on Google, Yahoo and Lycos is that each of these sites has their own branded destination where consumers go to search. If you advertise on these sites you know where your ads will appear (although even these bigger sites use affiliates to varying degrees). Once you venture into second tier Pay Per Click networks however you’ll find that almost all of their traffic is generated through partner sites. Companies like Kanoodle, Enhance etc…don’t own sites where people go to search web. Nearly all their traffic is generated through their affiliates which makes it more difficult to control fraud.

Conclusion:

Unfortunately, click fraud is a necessary evil of Pay Per Click Advertising, at least for now. However, as with most aspects of PPC Advertising everything eventually boils down to conversions and profits. If your campaigns are generating enough quality traffic to meet your conversion metrics you should continue to invest in campaign, even if some of clicks are fake. If your traffic is riddled with too many automated clicks it will eventually become obvious in your conversion numbers, and you should stop campaign and put your money into pay Per Click networks that control more of their own traffic.