- America’s biggest companies could have lost more than $700 million to fraud on their pay-per-click ads over the past year
- Click fraud is estimated to cost 14% of a company’s ad spend on average
- Google spent an estimated $680M on PPC, meaning it could have lost $95 million
- Dell is second biggest spender with $527 million annual spend, while Amazon is third
- Top 20 biggest spenders in Fortune 500 have allocated an estimated $3.4 billion to PPC over the past 12 months
Companies Have Lost $717 Million Dollars Due To Click Fraud
America’s biggest companies are estimated to have lost $717 million dollars over the past 12 months due to abuse of the adverts they have run on Google, new analysis has found.
The massive estimated loss is down to fraudulent activity on pay per click adverts (PPC), a marketing model where advertisers pay a fee when their ad is clicked. Industry experts have calculated that on average, 14% of a company’s spending on PPC can be lost to click fraud.
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The new study by click fraud prevention experts PPC Shield analysed data for each Fortune 500 company’s main consumer-facing website to find the total estimated cost of PPC activity between October 2020 and September 2021, and how much they might have lost.
Google’s parent company Alphabet is the Fortune 500’s biggest spender on pay per click ads, with the study estimating that the search giant has spent a massive $680 million over the past year on PPC for ads that appear on its own search platform. As a result, it could have lost up to $95 million dollars due to click fraud.
The search giant is followed by computer technology company Dell Technologies Inc (NYSE:DELL), internet retailer Amazon.com, Inc. (NASDAQ:AMZN), and telecommunications companies Charter Communications Inc (NASDAQ:CHTR) and Verizon Communications Inc. (NYSE:VZ) in the list of biggest spenders on PPC. The estimated total PPC spend of all Fortune 500 companies in the last 12 months comes to $5.127 billion, resulting in a possible loss of $717 million.
The second highest spender between October 2020 and September 2021 was Dell Technologies, with 12-month total outlay of $527,792,733 on PPC ads for the domain dell.com. Therefore click fraud could have cost the company $73 million.
Amazon comes third at a 12-month total of $343,462,677 and average of $28,621,890 monthly. At a 14% rate of click fraud, that equates to a $48 million loss.
Fourth and fifth positions are occupied by telecommunications companies Charter and Verizon, accumulating a 12-month PPC cost of $261,071,839 and $244,493,064 respectively. The resulting loss for each company to click fraud stands at approximately $35 million.
With a market capitalization of $2.456 trillion, Apple Inc (NASDAQ:AAPL) is the world’s biggest company, but it spends a tenth of the amount Google Inc (NASDAQ:GOOGL) does on PPC ads, with its total for the last 12 months coming to $68,321,688. However that would still result in a loss of nearly $10 million dollars to click fraud.
In total, the Fortune 500’s top 20 biggest PPC spenders had a combined outlay of $3,468,676,319 between October 2020 and September 2021, 14% of which would be $485 million.
PPC Shield – Fortune 500 Total Ad Traffic Cost ($USD) – Top 20
|PPC spend rank||Fortune 500 Company||Company’s Primary Consumer-Facing Domain||12 Months Total ($)||Potential loss to click fraud ($)|
|9||State Farm Insurance||statefarm.com||111,174,633||15,564,449|
|16||Automatic Data Processing||adp.com||64,453,717||9,023,520|
|17||Capital One Financial||capitalone.com||60,841,465||8,517,805|
|20||Farmers Insurance Exchange||farmers.com||52,505,282||7,350,739|
A spokesperson for PPC Shield commented: “These figures show how much the biggest and best companies in the world value the performance of PPC as a crucial part of their marketing strategy. They also demonstrate the considerable threat that click fraud poses, highlighting that every company, no matter the size of its budget, should ensure that its spend on pay per click advertising is properly protected from fraud. When competition for customers’ attention is so fierce, no business can afford to lose efficiency in its online marketing.”
The analysis was conducted by PPC Shield which enables brands and businesses to protect their online pay-per-click ad campaigns by filtering out and blocking fraudulent clicks, optimizing advertising expenditure.
A 12-month total cost of PPC ad traffic for each Fortune 500 company’s primary consumer-facing domain was calculated using data acquired from data analytics platform Semrush.
This data was calculated by Semrush using an average of click through rates and the positioning of the domain on Google Ads.
PPC Shield – Fortune 500 Monthly Ad Traffic Cost ($M USD) – Top 20