Click fraud starting to scare advertisers

April 13, 2005

PPC (pay-per-click) is an important factor behind the growth of search engine marketing and online advertising, but now some marketers are asking search engines how many of those clicks are fraudulent or invalid.

The growth of the Internet as a communications, commercial, information and entertainment medium has been phenomenal, but for all the excitement and optimism that has caused, occasionally a shadow falls and the sunshine cyberworld grows dark and ominous.

The newest dark cloud on horizon is click fraud.

Click fraud is not much of a concern to individual surfers, but it could become a big problem for marketers and advertisers. Some marketers are charging that search engines, the big benefactors of pay-for-click advertising, are not doing enough to protect them against the growing practice of click fraud.

Lane's Gifts and Collectibles, a Texarkana, Arkansas, retailer, filed a lawsuit in February against Google, Yahoo, AOL and other search sites alleging that they knowingly overcharged Lane's and other companies.

In a survey of marketers taken late last year, the Search Engine Marketing Professional Organization (SEMPO) found 77% of marketers were concerned about click fraud to some degree.

A recent article in the Wall Street Journal reported that some sources believe between 10% and 20% of paid clicks are "from people not necessarily interested in the product advertised, and therefore in the industry's view, fraudulent." Not everyone agrees that the numbers are that high.

Google and Yahoo have responded that not only do they provide refunds when their anti-fraud systems uncover foul play, they continuously monitor click results, looking for trends that would indicate cheating or "click bot" activity.

"Our goal is to identify unqualified traffic and filter it out before the advertiser even gets charged," John Slade, senior director at Yahoo Search Marketing, told Advertising Age.

But many marketers remain unsatisfied. In the same Ad Age article, Lori Weiman of Direct Response Technologies complained, "They don't tell you which keywords and which clicks were affected. If marketers knew this information they could change their keyword tactics."

Slowly, the giant search engines are starting to respond to these criticisms. They must. They have too much at stake not to.

Source: eMarketer.com

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