Search Engine Click Fraud Up, Says Monitoring Firm

Austin, TX, October 30, 2007--Click fraud, where competitors or crooked publishers click on ads to drive up the advertiser's cost, keeps on rising, contends a company that monitors click fraud.

Indeed, in the third quarter of this year, fraudulent clicks accounted for 16.2% of all ad clicks, up from 15.8% in second quarter and 13.8% in the third quarter 2006, according to a new report from Click Forensics. Over the last year click fraud has grown each quarter.

"As online ad revenues continue to grow, so has the click fraud percentage," says Tom Cuthbert, president and CEO.

And that's across all search-based advertising. It's even worse for search engine content networks such as Google AdSense and Yahoo Publisher Network, which place ads on websites and share revenue with their publishers, says Cuthbert.

Here click fraud accounted for 28.1% in the third quarter, up from 25.6% in the second and 21.9% in the first. Says Cuthbert: "Click fraud is growing across the board, but it is growing faster in the content networks."

Click fraud is the No. 1 gripe with the pay-for-click ad model, where advertisers are charged whenever someone clicks on their ad. It can be done by a person clicking manually but increasingly it's done by botnets, computers programmed to click on the ads.

In fact, botnets are a key driver behind the increase in click fraud this year, according to Cuthbert. "In the first and second quarter of this year the botnets activity doubled," he says.

Click fraud is typically the work of a competitor anxious to drive up the advertiser's cost of doing business or a publisher whose site is serving ads from Google or another big ad network, with an eye to lining his or her pockets with increased ad revenue. "The problem is that the publisher has a financial incentive for clicks to occur," says Cuthbert.

Cuthbert contends that more than 70% of sites that make up content networks like Google AdSense and Yahoo Publisher Network are sites created solely for the purpose of generating revenue from ads, without any real content. Further, he argues that about 60% of ad clicks from those sites are fraudulent. "That’s a bad formula for the advertiser," he says.

For its part, Google begs to differ. It says it doesn't believe click fraud is anywhere near that common on its ad network. "We generally think that the estimates of third-party click fraud monitoring systems are artificially high," referring to Click Forensics, a spokesperson tells Media Life. "We don’t agree that it is an increasing problem."

Google will not release specific figures but has said that fewer than 10% of the clicks it tracks are not legitimate, and it says it has systems in place to filter the vast majority of these out. Only 0.02% are caught reactively – in other words, after an advertiser has complained, says the company.