Wired News throws another log on the click fraud fire here. This is the story of BlowSearch, a meta search engine which has discovered that click fraud is rampant and is creating a tool to deal with it.
Let’s pull back to 50,000 feet here for a second. Advertisers and SEMs are saying that clickfraud, in aggregate, accounts for 15-20% of all spending (I had two major agencies confirm this figure to me again this week). Why do they say this? Because they are on the front lines and see the non-performing clicks, the domain parking lots filled with AdSense ads, the odd patterns of clicks in the middle of the night from what have to be robots or armies of third-world paid-to-clickers. It’s hard to substantiate these claims, but let’s think about this for a minute: 20%! That’s more than a billion dollars in fraud in an industry growing faster than anything else in the media business.
Now, it’s in the advertisers’ best interest to claim this kind of fraud, for the more they can say some clicks are fraudulent, the more refunds they get from Google et al, and the higher their “real” conversion rates are. So, caveat number one, take advertisers claims with a grain of salt.
Now, on the other end of the spectrum, folks at both Yahoo and Google have sworn up and down to me that click fraud is not a very big deal, that the level of fraud is, by their estimation, in the low single digits. Why would they say this? Why, because they see everything, of course, and are deeply motivated to not only find fraud, but to ferret it out. After all, if their networks are seen as scamming the advertiser, everyone loses.
Except, let’s examine the motivations on this side of the equation. Clearly, it’s in the engines’ best interests to say that clickfraud is not a major issue, and that they have it under control. It’s also in their best interests, at least in the short term, to allow a bit of fraud to happen. After all, it’s just a tax on what is still an incredibly efficient method of marketing. Clearly advertisers are not stopping their spending because of what they see as 20% clickfraud. Search marketing is so efficient that a 20% “clickfraud markup” is justified in the advertiser mind. The market will bear it, so why not let it happen?
The truth is probably, as always, somewhere in the middle. There is probably more fraud happening than the engines will admit, or find, and less than the advertisers claim. But it’s maddening that we don’t have a way of knowing for sure, because Google and Yahoo will not engage with the advertisers in a high level dialogue of trust, one where the two sides can compare notes. I hope that changes soon.
UDPATE: After some feedback, I’ve realized that my post may have led some to think that I believe that the major engines are in fact actively allowing fraud to occur. I don’t think that is the case. In fact, it’s in their long term interest to eradicate it, which is why I think it’d be great if they worked with major agencies/advertisers to combat it in a unified fashion. I sense that for every ten smart engineers Yahoo and Google have working on detecting and beating click fraud, there are 10,000 folks trying to game the system. Unless both advertisers and engines work together in a trusting relationship to compare notes and figure out how to fix this, the Force Of Many will outpace the engine’s best efforts (and the advertisers will always claim that there is more fraud than the engine’s claim there is).