Click Fraud Threatens the Golden Goose

AdJab reports on the Business Week analysis of click fraud.  In addition The New York Times has a similar report covering the growth of click fraud.  With spending on online advertising skyrocketing and projecting to continue to do so over the next few years, the increasing evidence of click fraud is starting to raise red flags among marketers and the search engines that rely on this revenue stream. 

Business Week claims that most academics and consultants estimate that 10 - 15% of all clicks are fraudulent.  This may be drastically understating the case if research conducted by ClickFacts for their client Radiator.com is any indication.  Their research found that for this client, 35% of ads generated by Google and 17% of those resulting from Yahoo! were fraudulent.  Click Assurance was quoted as finding that 10 - 20% of all clicks were fraudulent in an aticle published in The Wall Street Journal last year. 

Reducing Click Fraud
So what can you do to reduce click fraud? Using Google as an example, ZDNet recommends that you start by turning off the content network option for keyword purchases.  This means that the ads will only appear on the Google search engine or search engine partners. 

Both Google and Yahoo! have faced legal problems from click fraud claims.  They are each beefing up their detection and education processes to help reduce the potential for fraudulent clicks in the future.  Wired reports on Google's experimenting with cost-per-action which would require that beyond the click some sort of action - signing up for a newsletter, asking for information, purchasing a product, etc. be used as the metric for purchasing ads.

David Reeve, from WebVisible, in an editorial published at the Search Engine Marketing Professionals Organization (SEMPO) web site has suggested that the solution is to institute 3rd Party auditing of clicks. 

As a minor purchaser of Google Ad Sense Pay Per Click ads for my own business and as a consultant on keyword purchases for other online advertisers, I know that this issue is one that concerns me.