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Apr. 28, 2008

According to the latest Click Fraud Index by Click Forensics, the amount of overall click fraud rate decreased slightly in the first quarter of 2008. This was in part possible by actions taken by Google and Yahoo.

The industry average click fraud rate was 16.3 percent in the quarter, down slightly from the 16.6 percent rate reported in the previous 2007 quarter, but still up from the 14.8 percent rate reported for the first quarter of last year.

The average click fraud rate of PPC (pay-per-click) advertisements appearing on search engine content networks, including Google's AdSense and the YPN (Yahoo Publisher Network) was 27.8 percent. That's down from the 28.3 percent rate reported for the fourth quarter of last year, and up from the 21.9 percent average click fraud rate reported for Q1 2007.

Meanwhile, click fraud traffic from so-called botnets in the first quarter was about 8 percent higher than in the preceding quarter. The greatest percentage of click fraud originating from countries outside North America during the quarter came from Monaco, Ghana and New Caledonia.

Click Forensics President Tom Cuthbert said in a statement "Yahoo has been working with us since the beginning of the year, and Google is working on the problem as well, and we believe they and many others will be working with third parties to help solve this growing problem."

Yahoo's recent appointment of Reggie Davis as its vice president of marketplace quality is evidence of the search engine's serious commitment in fighting click fraud, Cuthbert noted. "They took a leadership role by naming Reggie at the v.p. level to tackle the problem headon and have since promised to be more transparent."

Click fraud data is tracked and published on a quarterly basis for specific search providers, industries and trends. The service monitors online campaigns for click fraud by correlating data collected from search provider campaigns and the advertisers' own Web sites.

Now in its third year, the Click Fraud Index publishes data collected from the Click Fraud Network, a third-party click fraud detection service dedicated in helping companies more accurately monitor their online advertising campaigns for pay-per-click fraud.

The Click Fraud Index utilizes technology that is very similar to e-mail spam detection. "We have access to some information that the search engines don't, on things that happen on the advertisers' sites. That's one reason Yahoo partnered with us," added Cuthbert.

Click fraud has become almost an epidemic, and dealing with it is long overdue, Precursor President Scott Cleland said.

"Click Forensics reveals that more than 27.2 percent of all clicks are fraudulent. If that is the case, then there is a problem. It was something search engines needed to address, but they want to address it quietly so they don't bring attention to the problem," added Cleland.

However, the efficiency of third-party audits is sometimes questionable, noted Gartner analyst Avivah Litan. "I'd just question how they came up with their index, because click fraud is really difficult to measure," said Litan.

"There's no reliable source other than the search engines, and you need to understand that they're not going to release that kind of information to anybody."

Once an ad is loaded, it's rather difficult for a company like Google or Yahoo to accurately track click fraud, Litan said.

"An ad can be manipulated, and they don't have a good way to know it's click fraud. So, I'd just question any source on that," said Litan.

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Source: Click Forensics.