Traffic is often considered to be one of the most important factors to consider when valuing a website. Generally speaking, the more traffic a website has, the more valuable that website will be. Of course, there are a multitude of other factors which can influence the value of traffic, for instance, the overall quality of the traffic.
Traffic quality is dependent on a number of factors including:
- The longterm stability of the traffic.
- The ability to monetize the traffic.
- The bounce rate of the traffic.
- The geo location of the traffic.
- The source of the traffic.
- The cost of the traffic.
However, before you can determine the quality of traffic, you should first determine whether or not the traffic is real.
What is fake traffic?
Fake traffic is traffic that is generated by bots or software, as opposed to human interaction. Normally purchased from third party providers, fake traffic is often used to artificially inflate the value of a website before it is put up for sale. The primary issue with fake traffic is that it is not sustainable.
Any conversions achieved through fake traffic are likely to cease after an advertising network identifies the traffic as fake. Moreover, as most advertising networks (such as Google Adsense) consider fake traffic a form of click fraud, it usually results in sanctions being placed on the publisher’s advertising account once it is uncovered.
Unfortunately, buyers who unknowingly purchase websites inflated with fake traffic are not only likely to overpay for these digital properties, they are likely to see their traffic dramatically decrease and risk having their advertising accounts sanctioned.
Identifying fake traffic
In order to identify fake traffic, you should start by reviewing a site’s analytics. Of course, Google Analytics is the industry standard, and as part of a comprehensive due diligence effort you should ask the seller of a website for Read Only access to their site’s Google Analytics.
Once you have been grated access to analytics, check the following factors in the Audience Overview.
- Bounce Rate: An extremely high Bounce Rate may be cause for concern.
- Pages/Session: An extremely low Pages/Session may be cause for concern.
- Avg. Session Duration: An extremely short Avg. Session Duration may be cause for concern.
- New Sessions: An extremely high percentage of New Sessions may be cause for concern. Likewise, an extremely low percentage of New Sessions may also be cause for concern.
Three other Google Analytics’ Audience Overview metrics which can be helpful in identifying fake traffic are Language, Country, and City. You should be looking to see if the sessions are consistent with the content of the website. For example, if the website content is aimed primarily at an english language audience, but it is receiving significant amount of it’s traffic from primarily non-english speaking countries, this may be cause for concern.
Finally, in addition to analytics you can also check onsite factors for signs of user interaction. For example, if a site is claiming a high number of unique visitors but none of the articles on the site are being commented on, and/or the social networking accounts have little to no interaction, this may be cause for concern.
It is important to remember that no single metric will tell the entire story, especially if the website is receiving both real and fake traffic. Instead, identifying fake traffic depends on your ability to synthesis multiple factors and identify and investigate any suspicious data or irregularities. The more red flags which are raised the more skeptical you should be.
For more information on fake traffic and due diligence, please see the following resources: