Detecting ‘Click Fraud’ – A Fast-Growing Cottage Industry

Source: Wall Street Journal
9 June 2005

Dave’s Comments (Digital Marketing Tutorial Blog): “Click Fraud”?! Just when you were getting ready to dip your toes (and budget) into the world of search engine advertising, you hear the dreaded phrase, “click fraud”. What’s a marketer to do? Here are some words of wisdom from the Wall Street Journal.

“The search-ad market is estimated at around $4 billion in the U.S. in 2004, and the vast majority of Google’s revenue comes from search and similar keyword-triggered Web-site ads. But there is increasing evidence that some people are clicking on such ads either to run up fees for competitors, to boost the placement of their own ads or to make money for themselves.

The Web-search companies concede that click fraud is an issue but decline to quantify its scope; some outside estimates run as high as 20% of all clicks. Many companies complain that Google, Yahoo and other search engines are vague about how they are tackling the problem, unresponsive to questions about suspect clicks and ineffective when advertisers point out possible abuses.

Sensing a business opportunity, entrepreneurs have built up a cottage industry to capitalize on search-advertiser discontent. Their services, with names such as Clickfacts, ClickDetective, WhosClickingWho, and PPCTrax.com, generally monitor records of visitors who come to their clients’ Web sites via search ads. To sniff out fraudsters, they rely on such clues as the numerical addresses that computers provide when they connect. Advertisers can take that information to the search companies to request credits to their ad budgets for fraudulent clicks.”