How Click Fraud Could Swallow the Internet

[Kristijntje]

Pay-per-click advertising is big, big, big business. So are bogus hits on Internet ads. It's search giants against scam artists in an arms race that could crash the entire online economy.

Cauff was a victim of "click fraud," the illicit manipulation of keyword-based advertising. In this case, the scam appeared straightforward - one company clicked on a rival's search engine ads to drive up its costs. More complex is a second type of bogus ad click that exploits a second form of PPC advertising: ads fed to Web sites - anything from personal blogs to the sites of major corporations - by search providers like Google, Yahoo!, LookSmart, and, soon, MSN. The search engine indexes the content of the Web site and matches it with a group of relevant ads...

The amount of click fraud is difficult to quantify; estimates of the proportion of fake clicks run from as low as 1 in 10 to as high as 1 in 2. In a widely cited recent study, MarketingExperiments.com, an online marketing research outfit, reported that "as much as 29.5 percent" of the clicks in three experimental PPC campaigns on Google were fraudulent...

full article: http://www.wired.com/wired/archive/14.01/fraud.html

related topics:
New Developments in the Google AdSense Click Fraud Lawsuit http://community.tuliptools.com/index.ph...658.0.html
Commission Junction Hires Web Detectives http://community.tuliptools.com/index.ph...069.0.html

[mandy]

Peddling smut has always been a lucrative business on the Internet Get Linux or Windows Managed Hosting Services with Industry Leading Fanatical Support., but apparently it isn't lucrative enough for some skin merchants.

According to a statement released yesterday by Kessler International (KI), a cybercrime investigations firm based in New York City, pornographers are turning to click-fraud to supplement income generated by their vice sites...

According to KI's statement, its six-month investigation into PPC programs revealed that some unscrupulous affiliates were linking dirty pictures at their Web sites to the sites of PPC advertisers, including family attraction parks, high profile law firms, children's toy companies and religious ministries...

...click-fraud cost online merchants US$800 million in 2004.

full article: http://www.ecommercetimes.com/story/dtpl...raud.xhtml

[mandy]

A related article:

Depending upon who you ask, click fraud -- the practice of triggering pay-per-click fees by clicking on an advertising link with dishonest motives -- is either a minor nuisance for the search industry or a huge risk to one of the fastest-growing segments of the Web business. Nearly everyone agrees that the problem of click fraud is nothing new, however, and that even if it remains contained, it calls into question the value of one of the hottest forms of advertising available to marketers, online or off.

"From an industry perspective, I think we're in a really high growth market and in a market like that you're always going to find folks who are trying to game the system," LookSmart CEO David Hills said. "Sometimes I wonder if this was what it was like in San Francisco in 1849 when the gold rush started and how people always try to take advantage of those environments."...

full article: http://ecommercetimes.com/story/J7830uyG...raud.xhtml

[Kristijntje]

Online merchant who have been victimized by click fraud should definitely take action, experts say.

"A number of times we've found erroneous clicks or patterns that were kind of suspicious," Low says. "And we've reported it to Google, and they're usually pretty good about negotiating a portion of the clicks. So you can negotiate with them directly."

Providing proof is key, he notes. "Typically what they'll do is they'll ask you to send them a copy of reports from your log files so they can take a look at it and verify."

Indeed, watching your traffic data like a hawk is essential in combating click fraud, Stricchiola says. Sites need to create benchmarks that describe routine site activity. "Get familiar with what your conversion rates are from search traffic. Get an idea down to the keyword level how your traffic is behaving and performing," she says. "And keep benchmarking."...

full article: http://www.ecommerce-guide.com/solutions...hp/3587831

[mandy]

A related article:

When search Goliath Google settled a click-fraud suit with Lane's Gifts last month, the search industry's collective eyebrows went up. Maybe there was a problem.

Except no one knows how bad the problem is. The industry whisper number ranges from 10 percent to 30 percent of all clicks. And search providers insist they have mechanisms to keep it under control. But you can't keep something under control if you can't define it. The industry first needs to know what constitutes a fraudulent click and what constitutes an unqualified click.

A so-called unqualified click could be made by a person who either clicked on the ad by mistake or clicked expecting a different type of site.

Fraudulent clicks are generated by human hand or by bots programmed to hit competitors' sites over and over. The result is a decrease in the retailer's return on investment.

full article: http://www.internetnews.com/ec-news/article.php/3599201

[mandy]

An editorial on Click Fraud:

Click fraud is to Google and Yahoo what bird flu is to world health -- a problem that's manageable today, but could grow into a crisis without aggressive prevention efforts.

Silicon Valley's twin titans of the Internet era get almost all their revenues from pay-per-click advertising.

Advertisers hire Google and Yahoo to distribute the online equivalent of billboards that take people to the advertisers' sites. But advertisers pay only when someone is interested enough to click on their links.

There are several variants of pay-per-click advertising, but one form is particularly relevant to click fraud: affiliate networks...

full article: http://www.siliconvalley.com/mld/silicon...361354.htm

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http://community.tuliptools.com/index.ph...267.0.html
Google Discusses Steps It Takes to Combat AdWords Click Fraud
http://community.tuliptools.com/index.ph...960.0.html
Many Smaller Sites Violating Google AdSense TOS By Encouraging Visitors to Click
http://community.tuliptools.com/index.ph...260.0.html

[mandy]

New report shows click fraud rose in the second quarter.  The report showed significantly higher click fraud rates for high priced keywords.

Online advertisers beware. Click fraud is on the rise, according to numbers released Monday by the Click Fraud Index, an independent click fraud reporting service. Pay-per-click fraud reached 14.1 percent of all clicks tallied in the second quarter of 2006, according to the Index, which monitors and reports on data gathered from the Click Fraud Network...

One of the biggest takeaways from this latest index was that the click fraud rate for high-priced search terms -- defined as US$2 or more -- reached 20.2 percent. "For the first time, we have industry data that clearly shows what many have expected -- organizations purchasing higher-priced search terms are significantly more vulnerable to click fraud," said Tom Cuthbert, president and CEO of Click Forensics...

full article: http://www.ecommercetimes.com/story/9wcU...Rise.xhtml

[mandy]

Another look at the click fraud problem:

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.and Google Inc. 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.

Now, Fleischmann's faith has been shaken. Over the past three years, he has noticed a growing number of puzzling clicks coming from such places as Botswana, Mongolia, and Syria. This seemed strange, since MostChoice steers customers to insurance and mortgage brokers only in the U.S. Fleischmann, who has an economics degree from Yale University and an MBA from Wharton, has used specially designed software to discover that the MostChoice ads being clicked from distant shores had appeared not on pages of Google or Yahoo but on curious Web sites with names like insurance1472.com and insurance060.com. He smelled a swindle, and he calculates it has cost his business more than $100,000 since 2003...

full article: http://www.businessweek.com/magazine/con...ign_id=ds5

[mandy]

Yet another Click Fraud article 

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...

full article: http://news.com.com/2100-1024_3-6118902.html?part=rss&tag=6118902&subj=news