free html hit counter Wide Open? | John Battelle's Search Blog

Wide Open?

By - July 19, 2004

Cnet today runs a piece on click fraud, the practice of driving revenue through fake clicks on paid search links. This has been something of a whistling-past-the-graveyard issue for the entire paid search field (see here and here). Stefanie Olsen reports. Worth a read.

….some marketing executives estimate that up to 20 percent of fees in certain advertising categories continue to be based on nonexistent consumers in today’s search industry.

In one recent example of the problem, law enforcement officials say a California man created a software program that he claimed could let spammers bilk Google out of millions of dollars in fraudulent clicks. Authorities said he was arrested while trying to blackmail Google for $150,000 to hand over the program. He was indicted by a California jury in June.

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5 thoughts on “Wide Open?

  1. Ravi says:

    The smart computer people never fail to generate new revenue streams. Now, we have the new category of “online click-fraud detection specialists”.

    There’ve been whispers of collusion between anti-virus vendors and the virus-creatos, will we now have such rumours around collaborations between click-fraudsters and click-fraud-detectors?

  2. The reality (as measured by web analytics systemss that tens of thousands of websites use, is that click-fraud accounts for 1-3% of paid search click-throughs. That’s a very small number, certainly nothing like what’s represented in the CNET article. Google and Overture both have significant and effective fraud detection measures in place, supported by technology, people, and the knowledge that click fraud is their problem to deal with.

  3. A bigger problem is a lesser known phenomena called “cookie shrinkage”, whereby advertisers are unable to track a subset of overall conversions from paid search (and other forms of online advertising) due to the fact that 2-10% of consumers (depending on the vertical) have disenabled cookies on their computer. This could have larger implications for paid search and online advertising in general, as it artificially dampens the perceived ROI from online advertising.

  4. Ravi says:

    I suppose the cookie shrinkage can be handled by passing some parameters on the URL, if its serious?

  5. Ron Arthur says:

    Click Fraud: Sofizar
    Is your PPC campaign getting sabotaged by fraudsters? Are you depleting 10%, 20%–even 40% of your budget on wasted clicks? How to catch these scammers with their hands in the cookie jar! If you advertise in Pay Per Click Programs like Google’s Adwords and Yahoo’s Overture, someone is keeping you from maximizing your profits. If you pay those megabucks for every click and you always seem to be getting a little less than you put in, Stop and Consider . Could you be the victim of click fraud?
    for more details just visit: http://www.sofizar.com/click-fraud.php