Click Fraud Report

Pay-Per-Click Fraud Exposed

Wed, 11 Oct 2006 20:20:20 -0800

Has anyone else noticed a disturbing pattern in your pay-per- click advertising campaign, of the same IP addresses clicking on your ad, spending one or two seconds on your website and then leaving?

That's called click fraud and it's a major problem among all of the pay-per-click search engines.

Click fraud is a scheme that takes advantage of online advertising programs like those offered by Google, Yahoo/Overture, Findwhat and others. A fraudulent website is set up and participates in programs like Google's AdSense program. Unlike legitimate websites that attract human visitors to the site, fraudsters use software "hitbots" or employ boiler-rooms of low-wage employees from other countries to generate clicks on ads, and then collect commission from pay-per-click programs
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Click fraud growing on the Web

Wed, 27 Sep 2006 11:51:05 -0800

A year ago, DiamondHarmony.com, an online jewelry store, decided that it had outgrown its sole source of advertising, which was eBay.

The company added an elaborate marketing effort on search engines that included a pay-per-click advertising campaign based on keywords and phrases. For its trouble, DiamondHarmonyDiamondHarmony became ensnared in click fraud.

Instead of actual prospects, the clicks were coming from fraudulent sources. The fraud, which cost DiamondHarmony $17,000 over seven months, was uncovered through analytical software the company installed from ClickTracks of Santa Cruz, Calif.

The dark side of online advertising

Wed, 27 Sep 2006 11:47:00 -0800

Martin Fleischmann put his faith in online advertising. He used it to build his Atlanta company, MostChoice.com, which offers consumers rate quotes and other information on insurance and mortgages. Last year he paid Yahoo! Inc. (YHOO )and Google Inc. (GOOG ) a total of $2 million in advertising fees. The 40-year-old entrepreneur believed the celebrated promise of Internet marketing: You pay only when prospective customers click on your ads.

Google CEO clicks ads 'all the time,' are his clicks marked 'invalid'?

Fri, 01 Sep 2006 10:00:25 -0800

Google CEO Eric Schmidt recently revealed that he clicks on Google ads "all the time." Asked at the Search Engine Strategies Conference earlier this month "When was the last time you clicked on an ad, and why, at Google?" Schmidt acknowledged:

I do it all the time, probably because I want to make sure that everything was working.

Are such evaluation clicks by the Google CEO registered by Google as "invalid clicks" and filtered out before advertisers are billed? Or, are Google advertisers charged for a click each time Schmidt clicks on a Google ad under the guise of making sure that "everything was working?"

Click Fraud Threatens Web

Sat, 05 Aug 2006 23:42:36 -0800

The Federal Trade Commission believes that no place is more fraud-friendly than the web. The agency estimates that more than one in 10 Americans (perhaps as many as 30 million people in this country) have fallen victim to fraud. Last year, internet-related fraud complaints surpassed all others, comprising 55 percent of all digital malfeasance, and for the first time the net supplanted the telephone as the most popular initial point of contact for dupers to meet dupees.

An almost endless array of clever schemes exists to separate consumers from their money. There are cross-border scams that consist of fake foreign lotteries, phony prize promotions, advance-fee loan cons and the infamous Nigerian scam. Charity scams take advantage of consumers' generosity while so-called home-opportunity scams zero in on people looking for an easy way to make a few extra bucks. Identity thieves "phish" for personal information, like account numbers and PINs, which they use to sink your good credit (while sucking every penny out of your bank account). Pop-up spammers rely on nefarious methods to secretly wrest control of your PC desktop so they can pummel you with ads. Auction fraud accounts for half of the complaints the agency receives.

How Click Fraud could swallow the Internet

Sat, 05 Aug 2006 23:39:55 -0800

Stuart Cauff launched a charter-jet service in Miami Beach back in 2002. Being a 21st-century business, JetNetwork advertised on the Internet, especially on search engines. Anyone who Googled, say, "air charter Miami" would be greeted with the familiar list of search results and, in a separate place, a plain box of text with a blue hyperlink to JetNetwork's Web site.

Exposing Click Fraud

Sat, 05 Aug 2006 23:38:06 -0800

Internet marketers facing higher advertising fees on search networks are becoming increasingly concerned about a form of online fraud that was thought to have been contained years ago.

The practice, known as "click fraud," began in the early days of the Internet's mainstream popularity with programs that automatically surfed Web sites to increase traffic figures. This led companies to develop policing technologies touted as antidotes to the problem. But 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.

The Spyware - Click-Fraud Connection -- and Yahoo's Role Revisited

Tue, 27 Jun 2006 08:56:57 -0800

In August I reported a startling number of notorious spyware programs receiving payments, directly or indirectly, from Yahoo!'s pay-per-click (PPC) (Overture) search system. Yahoo pays numerous other companies to show these ads via syndication relationships. So when a spyware vendor can't find advertisers to buy its ad inventory directly, the spyware vendor can show Yahoo ads instead. Every time a user clicks on such an ad, the advertiser must pay Yahoo. Then Yahoo pays a revenue share to the spyware vendor that showed the ad. My August article documented relationships between Yahoo and 180solutions, Claria, Direct Revenue, eXact Advertising, IBIS, and SideFind.

My August article covered "just a few of the ... examples I have observed and recorded." Since then, my Yahoo-spyware collection has grown dramatically. I now have many dozens of different examples of Yahoo pay-per-click ads shown within spyware.

My August examples demonstrate what I call "syndication fraud" -- Yahoo placing advertisers' ads into spyware programs, and charging advertisers for resulting clicks. But Yahoo's spyware problems extend beyond improper syndication. In my August syndication fraud examples, an advertiser only pays Yahoo if a user clicks the advertiser's ad. Not so for three of today's examples. Here, spyware completely fakes a click -- causing Yahoo to charge an advertiser a "pay-per-click" fee, even though no user actually clicked on any pay-per-click link. This is "click fraud."

Google Click Fraud Settlement Questioned

Wed, 07 Jun 2006 07:47:01 -0800

An attorney for plaintiffs in a California click fraud case against Google has submitted a lengthy list of complaints about Google's Arkansas settlement to the search engine and asked that they meet about problems perceived with that settlement.

Brian Kabateck of Kabateck Brown Kellner has not received a response to a letter he submitted to his Google counterparts about the proposed settlement in the Lane's Gifts v Google case. That settlement will come up for a final fairness hearing soon before the Arkansas judge, and right now, Kabateck doesn't think it's very fair.

The letter invited Google and their counsel to meet with Kabateck and other attorneys in the presence of a mediator to discuss "the many serious and substantive objections" they have to the $90 million settlement.

Google refund offer an `insult'

Thu, 11 May 2006 14:47:24 -0800

By Michael Liedtke
Associated Press
Published May 8, 2006

John Thys still hasn't figured out how much his company has paid Google Inc. for bogus sales referrals caused by "click fraud"--a sham aimed at a perceived weakness in the Internet search leader's lucrative advertising network.

But Thys says he has uncovered enough of it to conclude that Google is trying to shortchange his company and thousands of other advertisers by offering refunds totaling $60 million to settle a lawsuit.

"It's almost like an insult that they expect us to take this token money," said Thys, director of Internet marketing for Radiators.com.

Google also expects to pay $30 million to the lawyers who settled the case on behalf of advertisers, raising the settlement's total value to as high as $90 million. Still, that's a fraction of the more than $10 billion in cash held by the Mountain View, Calif.-based search company.

An Arkansas judge is expected to consider the proposed class-action settlement in late July.

The refunds, which will be provided in the form of advertising credits, are meant to compensate Google's customers for undetected click fraud, which contributed to the $13.3 billion in ad revenue that has poured into the company since 2001.

Google's offer works out to a $4.50 refund on every $1,000 spent in its vast advertising network over the past 4 1/4 years.

Meanwhile, independent studies assert that anywhere from $100 to $400 of every $1,000 stems from click fraud. If those estimates prove correct, Google might be on the hook for $1 billion to $5 billion in advertising refunds.

Google settlement or not, click fraud won't go away

Thu, 13 Apr 2006 12:01:50 -0800

With a planned $90 million settlement, Google could soon dispense with a class-action lawsuit involving so-called click fraud.

But while that may be good for Google, it doesn't mean the problem of bogus clicks on online ads--which advertisers have to pay for--is going to disappear anytime soon. A lack of clear standards for determining what is a fraudulent click, or some sort of third-party clearinghouse to monitor the situation, means some advertisers believe they can't do much more than head to the courts when they think there's a problem.

Certainly, Google and Yahoo, which run the two largest pay-per-click advertising networks, say they're addressing the problem. But some click auditing companies still claim that between 20 percent and 35 percent of clicks on Net advertisements are fraudulent.

In Game of Click and Mouse, Advertisers Come Up Empty

Thu, 13 Apr 2006 08:10:46 -0800

Radiator.com got a jolt this month from the firm it hired to audit the nearly $40,000 worth of sponsored links it buys every month from Google and Yahoo.

It appears that many of the clicks on the Web site's search-engine ads were made not by potential customers but instead by automated programs or people trying to drive up Radiator's advertising bill. Like other advertisers that place links on search engines, Radiator.com pays only when people click on the links.

After analyzing where and when each click came from, auditing firm ClickFacts Inc. estimated that 35 percent of the referrals that Radiator paid Google for stemmed from bogus traffic. Likewise, 17 percent of the leads that came from Yahoo search results were illegitimate.

Clicking To Steal

Wed, 29 Mar 2006 07:48:17 -0800

To Texas-based Auctions Expert International LLC, it was an easy way to make money on the Internet. Sign up with Google, which functions as a kind of online ad agency, and agree to let the online giant place ads on your Web site. Then, every time someone clicks on one of the ads, the advertiser pays a fee, and Google shares that fee with Auctions Expert.

The problem, according to a lawsuit filed last year by Google, is that Auctions Expert began clicking on the ads itself, artificially inflating the number of clicks and driving up the bills sent to advertisers.

The Real Problem With Click Fraud

Mon, 20 Mar 2006 07:36:58 -0800

Reader "Anon" posted a link to today's Washington Post story on click fraud. The story tells a familiar tale--a company hired a fraud-detection firm to audit its clickstreams and found that an estimated one-third of the clicks were bogus. The story also describes the latest bot-clicking technology ("You, too, can deplete your competition's keyword budget in ten minutes!!!"). As usual, no hard numbers, just estimates from various fraud-detection firms that 20%-40% of clicks are fake.

Google agrees to pay $90 mln on click fraud lawsuit

Thu, 09 Mar 2006 13:18:01 -0800

SAN DIEGO (Reuters) - Web search leader Google Inc. said on Wednesday it had agreed to pay up to $90 million to settle a class action lawsuit over advertising fraud by outside parties on its site, in a bid to put the controversy behind it.

The settlement stems from a lawsuit filed by Lane's Gifts earlier this year in an Arkansas state court and is designed to settle all outstanding claims against Google for fraud committed using its pay-per-click ad system back to 2002, it said.