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June 09, 2005
'Click Fraud' Costly to Search Engine Advertisers
As many as 20 percent of all "clicks" on Web-search site ads are fraudulent – and those false clicks can cost an advertiser plenty.
Companies pay search firms such as Google and Yahoo a fee each time someone clicks on one of their ads, and a single click can cost $100.
But some people are maliciously clicking on ads to drive up competitors' bills.
"Click fraud" refers to the practice of "clicking on pay-per-click ads without the intent to buy advertisers' products or services," according to Clicklab LLC, a company that helps advertisers fight click fraud.
"It can be perpetrated by persons who systemically click on links, or use software to do so, to either garner profit for themselves through click commissions or to purposefully deplete the pay-per-click funds of a competitor."
The search-ad market is estimated at about $4 billion annually in the U.S.
"The Web-search companies concede that click fraud is an issue but decline to quantify its scope," the Wall Street Journal reports.
"Some outside estimates run as high as 20 percent of all clicks. Many companies complain that Google, Yahoo and other search engines are vague about how they are tackling the problem and unresponsive to questions about suspect clicks."
A Texarkana, Ark., retailer, Lane's Gifts & Collectibles LLC filed a lawsuit against several search engine companies, alleging the firms knowingly charged for fraudulent clicks. Other companies have turned to Clicklab and other anti-click-fraud services such as ClickDetective and WhosClickingWho for help.
To sniff out fraud, Clicklab examines more than 30 factors, such as the length of time spent on a client's site.
With WhosClickingWho, the service detects when someone has clicked on an ad multiple times and sends a pop-up message to the culprit warning that the service is tracking him.
Most important, the services provide reports that advertisers can use to negotiate refunds from search companies for the fraudulent clicks.
Thursday, June 9, 2005 3:24 p.m. EDT
Posted by Hans A. Koch at June 9, 2005 03:24 AM