Search Engine Optimisation, Promotion and Internet Marketing

Warning over threat of click fraud

6 May 2005

Internet advertising revenue soared to a record $9.6 billion in 2004, almost 33 per cent higher than in 2003, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.

However, the threat of click fraud continues to taint the industry and estimates of the practice range from next to nothing to 20 per cent of all clicks.

Advertisers are becoming increasingly wary and are monitoring their data and negotiating with search engines for refunds and auditing for click fraud.

More and more companies are purchasing online ads and, but some firms are warning that the prospect of click fraud threatens future growth, Information Week reports.

Online gift company Lane's Gifts & Collectibles and Caulfield Investigations, a private investigation firm, filed a class-action lawsuit in Arkansas in February alleging that search engines, including America Online, Google, and Yahoo!, are billing advertisers for fraudulent clicks.

Click fraud comes in two major forms: competitive click fraud and network click fraud and a number of companies now offer click-fraud protection, including Tracking ROI and Clicklab.

In competitive click fraud, a competitor clicks on a business's online ad, which the advertiser then has to pay for. Network click fraud occurs when an ad syndication partner manufactures phoney click traffic to generate a revenue-sharing payment from the syndicating search engine.

The Search Engine Marketing Professional Organization found that 70 per cent of advertisers expressed some concern about click fraud, with more than a third of respondents rating it as a moderate or significant problem.

Google and Yahoo! deny that click fraud is a substantial problem and insist they both have adequate protection systems in place.

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