Click Fraud rises

By Steve Malone

Posted on 18 Jul 2006 at 10:40

The report has been published by the Click Fraud Index which monitors and reports on data gathered from the Click Fraud Network of more than 1,300 online advertisers and their agencies.

The survey also found what many people have long suspected, that click fraud is more prevalent on high priced keywords than lower cost ones. According to the report, the overall industry average click fraud rate was 14.1 per cent in the second quarter of 2006, slightly higher than the average of 13.7 percent for Q1. However, the industry average click fraud rate for high-priced search terms costing two dollars or more was 20.2 per cent. Of course, the most expensive keywords are the ones most likely to eat up an advertiser's campaign fund more quickly.

'One of the most interesting findings from our Q2 data was the difference between the overall average industry click fraud rate and the click fraud rate for the most expensive search terms,' remarked Tom Cuthbert, president and CEO of Click Forensics, LLC. 'For the first time, we have industry data that clearly shows what many have expected - organisations purchasing higher-priced search terms are significantly more vulnerable to click fraud.'

Interestingly, the click fraudsters are learning to stay clear of the biggest search marketing companies who are more likely to have systems in place to detect and punish fraudsters. Top league search providers Yahoo! and Google registered just 12.8 per cent rising slightly from the 12.1 per cent figure recorded in the first quarter of the year. In comparison, the average for Tier 2 search providers was 20.3 per cent and Tier 3 providers recorded a 27.1 per cent fraud rate according to the survey.

The greatest percentage of click fraud, more than 88 percent, originated from within the U.S. and Canada. Outside North America, the greatest amount of click fraud originated from India. Unwanted click activity originating from India increased 26 per cent during the second quarter of this year.

Last week, a tremor went through the search market when Google CEO Eric Schmidt, was reported as saying that click fraud was a 'self correcting' mechanism. However, Google hurriedly issued a denial saying that Schmidt actually said click fraud is 'a bad thing and because we don't like it, and because it does, at least for the short-term, create some problems before the advertiser sees it, we go ahead and try to detect it and eliminate it'. The statement emphasised that Google tried to detect every invalid click that passes through its system.