ON LINE MARKETING ADVERTISING FOR BUSINESS

Wednesday, 6 August 2008
Click fraud rate on the rise


By Dave Porter

(AXcess News) Reno - According to ClickForensics.com, the click fraud rate for the pay-per-click industry in the first quarter of 2008 rose 10.1% over the same period in 2007 with the overall average click fraud rate standing at 16.3%. The worst offenders were the major search engines, Google and Yahoo, whose click fraud rates rose a whopping 26.9% year-over-year in the first quarter of 2008.

In an April 25, 2008 press release, ClickForensics.com President Tom Cuthbert was quoted as saying, "Our Q1 2008 data bears out what industry analysts have suspected for several months - Yahoo! and Google seem to be finally filtering out more of the click fraud and non-converting traffic they used to let through."

Yet Cuthbert's comments only took into consideration the results when comparing the two latest quarters, not year-over-year. ClickForensics.com says the average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 27.8 percent in the first quarter of 2008. That's down from the 28.3 percent rate reported for fourth quarter of 2007.

While in the past I've ranted about overall online advertising statistics, my hat's off to Click Forensics, which says some 4,000 advertisers and online ad agencies are providing the data for its Click Fraud Index, now in its third year. IAB's quarterly reports on online advertising results for the U.S., which are compiled by PricewaterhouseCoopers, monitor the top 50 advertisers and do not take into consideration all of the longtail sources. Borrell & Associates also monitors online advertising sales results for those corresponding periods, only it takes into consideration the contribution of local advertising sales, adding several billion dollars to the equation. So while I ranted about it, in looking at the click fraud numbers Click Forensics provides, they're taking it all in and pooling the data from every advertiser willing to sign up and add their tracking code to their landing pages. To me, that appears quite unbiased and I'm rooting for more sites to join the ClickFraudNetwork.com - where use of its tracking code is free to all members.

Click Forensics noted that fraudulent clicks from botnets rose 8% in the first quarter of this year compared to the prior period, which is an alarming increase! But an un-monitored source of fraudulent clicks can also be credited to pay-to-click websites that pay users to click on ads. While it is difficult to filter out these clicks, the fact that they spend only enough time on a page to register the hit and move on, the cost of these worthless visits is being passed through to the advertiser. I should point out that Google and Yahoo! are not a party to this type of practice, though the two search providers do make up the bulk of clicks coming from parked domains and Made for Ads (MFA) sites. That aspect alone creates paid clicks that too often are not providing the advertiser any results - though it's a thin stretch to ask for a credit back as they are legitimate clicks. The providers contend that they're not responsible for visitors actions, meaning "you can't blame us if the visitor doesn't buy your services." Still, it is a quality issue and one the search engines are reluctant to give up due to the revenue it produces for them.

If all this has you sore, I sympathize with you, but until the PPC industry is wrestled to the ground and they agree to a 'standard' they'll all agree to abide by there isn't much anyone can do. Monitoring your traffic with a third-party does little good if the PPC agency won't recognize it as a source to go by. Even sending raw logs, proving the IP addresses that actually visited your site may not be enough either. The reality of online PPC advertising is your going to get diluted with fraudulent clicks, botnets, MFAs and more and in the end you can only chalk it off to the cost of doing business. Hopefully this will be resolved in time. But until then, you should arm yourself with as many tools as possible to both monitor your PPC ads and improve your results.

Good luck out there!