Click Fraud Issues

Laura Thieme, President, Bizresearch

Click FraudShame on You, 11:15 a.m.  Tuesday morning

Moderator: Jeffrey Rohr, Optiem Media
Panelists: Jessie Stricchiola, Alchemist Media
Greg Boser, Web Guerrilla
Google’s Shuman Ghosemajunder & Yahoo’s John Slade

David A. Vise, Author, The Google Story says that the biggest Achilles’ heel in Google’s entire system called click fraud.  It’s the biggest threat to its business model, according to Vise.

S&P just downgraded Google’s rating in part due to click fraud concerns.  By the way, Yahoo was downgraded in November, 2005 as well by the S&P.  However, Google says the problem is more about measuring positive ROI.  Yahoo says it’s a serious but manageable problem.  Three ways to measure by Yahoo.  First, Yahoo says you should look at the advertiser data.  Says they want you to tell them about this.  Yahoo has partnered with four leading web analytics systems to monitor click fraud.  Google says it’s more important to monitor invalid clicks, not just click fraud. 

There are a number of new click fraud monitoring programs, just to name a few:

Hitslink, Click Detective, Clicklab, ClickTracy (Click Fraud Detective), PPC Trax, Adwatcher, ClickDefense.com, Lori Weiman’s Keyword Max

So, which one do you use?  First you need to know what type of data is important to monitor click fraud. 

There is a scoring mechanism to help search engines to determine if a click is invalid or not.  Knowing the vendors’ technology and their mechanism to score the invalidity of these clicks is going to be more important.

So what constitutes click fraud?

Depending on who you talk to, there might be two major types of click fraud:

  1. competitive click fraud
  2. affiliiate click fraud

What are reasons for click fraud?

Greg talked about Spyware, what might this do to click fraud analysis?  What if clickbots are smart enough to put fraudulent click activity through spyware intalled on individual computers?  What about proxies? 

PPC Network Efforts

Yahoo looks at as many as 20-50 data points, which may include:

If the data points indicate the click is unqualified, the Click Protection System marks the click in the billing system and the advertiser will not be billed.

Advertiser Opportunities for Click Fraud Detection:

Jessie brought up an interesting point.  She has seen a decline in responsiveness to click fraud inquiries to the search engines.  No tension here amongst the panelists….  But seriously, this must be a very difficult challenge for search engines to monitor, and the demand on their system, technology and people resources.  I can see both sides of the search engines as well as the advertiser’s concerns.  I personally have tried to click fraud investigated by a shopping search engine, and while I received a phone call, I never received resolution from the shopping search engine.  We pulled our advertising program from that search engine as a result.  They weren’t a large advertiser, so perhaps that’s why the shopping search engine wasn’t interested, or perhaps it’s because there simply aren’t enough people to investigate the matter and resolve it.

Possible Solutions:

  • Industry Intermediary
  • Cost Per Acquisition (CPA)

    • Greg and Jessie both feel that litigation cases are helping the industry.  No search engine sat on the click fraud panel until litigation occurred, so in Jessie’s mind perhaps litigation is good.  She’s an expert witness on a current case.