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Research Claims That Advertising Fraud Is On The Rise

Search Engines play down click fraud

   
4:41 pm on Jul 21, 2006 (gmt 0)

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A report by Click Forensics has claimed that so-called click fraud is on the rise, potentially undermining the way many free sites are supported.

Click Forensics claimed that more than one in 10 responses to online advertising is not authentic, and the number is growing.

Research claims that advertising fraud is on the rise [pcw.co.uk]

It's a scary thought if you look at the figures indicated: Estimated cost to industry is $1.3 billion a year and $500 million was lost business.

4:45 pm on Jul 21, 2006 (gmt 0)



Estimated cost to industry is $1.3 billion a year

To play Devil's advocate - how much of that 1.3 billion went to G$$gle?

In other, unrelated topic, "G$$gle's quarterly profit jumps 110%"

4:58 pm on Jul 21, 2006 (gmt 0)

WebmasterWorld Senior Member jomaxx is a WebmasterWorld Top Contributor of All Time 10+ Year Member



A report by Click Forensics has claimed that so-called click fraud is on the rise

Right, and a recent press release by "Antivirus Software Ltd" indicates that the threat of viruses is greater than ever.

5:03 pm on Jul 21, 2006 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



The so-called research comes from a company that stands to benefit from spreading exagerrated click fraud schemes.

[edited by: martinibuster at 5:13 pm (utc) on July 21, 2006]

5:04 pm on Jul 21, 2006 (gmt 0)

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Estimated cost to industry is $1.3 billion a year

That should be estimated cost to advertisers, the SE industry actually benefits from click fraud.

[edited by: TypicalSurfer at 5:10 pm (utc) on July 21, 2006]

6:11 pm on Jul 21, 2006 (gmt 0)



Its all those dummy search pages with the paid Yahoo the Google search listings on them. We have to assume that there are website owners of these, a small minority of which click on some of the top links every once in awhile to get a commission. If they all did this it would ad up to a fortune. If they did it once a day their click would register as a valid one.
6:21 pm on Jul 21, 2006 (gmt 0)

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Right, and a recent press release by "Antivirus Software Ltd" indicates that the threat of viruses is greater than ever.

spot on. I think this report is nonsense really - how on earth could they possibly have separated the fraud from the network issues/fickleness that prevents all paid for clicks from actually getting anywhere? And anyway so what? Most advertisers know their max price per lead/max budget so all click fraud does is change who gets that money. If click fraud was abolished tomorrow prices would only rise to compensate - it just means that some cretins are earning some cash. why is it such a big deal?

8:33 pm on Jul 21, 2006 (gmt 0)

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member



1 in 10 = $1.3 billion in click fraud = 10% of $13 billion spent on PPC advertising?

$13 billion? Wow. PPC must work, eh?

8:33 pm on Jul 21, 2006 (gmt 0)

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spot on. I think this report is nonsense really - how on earth could they possibly have separated the fraud from the network issues/fickleness that prevents all paid for clicks from actually getting anywhere?

This is a good point. There is fraud that can't be separated out from nonconverting clicks.

And anyway so what? Most advertisers know their max price per lead/max budget so all click fraud does is change who gets that money. If click fraud was abolished tomorrow prices would only rise to compensate - it just means that some cretins are earning some cash. why is it such a big deal?

It's still a crime. We don't refuse to prosecute burglars just because doors are unlocked.

9:27 pm on Jul 21, 2006 (gmt 0)



This topic was discussed at length in the July 21 thread titled "Study: Click fraud could threaten the pay-per-click model":

[webmasterworld.com...]

That thread was also a "Featured Home Page Discussion."

11:48 pm on Jul 21, 2006 (gmt 0)

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I see no authority in this document but maybe i just haven't heard of click forensics. in any case, to a large extent I believe pricing adjusts overtime to reflect click fraud. Advertisers care about one thing, ROI. Eventually, the ROI goes down as click-fraud goes up. As a result, bids began to retract in industries where click fraud is especially rampant, so you essentially keep the ROI at a constant through this fluctuation of bid pricing. As bid pricing fluctuates, so too does the amount of click fraud in any industry. If one day a thief was receiving $3 per click on a keyword and then the next that same thief was only receiving $2, then he'd also may choose to focus his computing power on another industry..So its in a constant state of fluctuation but maybe that's just how I see it.

What implication does this "fluctuation" have on us?
Well, if click fraud were to go away tomorrow, then advertisers would be wiling to pay that much more for their customer. They would suddenly see a higher ROI and thus be encouraged to bid more. So, the way I see it there is really no long term gain from combatting (or not combatting) click-fraud in especially tight industries.

But i'm just looking at from the standpoint of the publisher. There is a much bigger picture--the end-consumer--which could be looked at if one wanted to make the case as to why we should combat click-fraud.

11:59 pm on Jul 21, 2006 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



The deal with click forensics is that they offer a free click fraud reporting service. The data is aggregated and turned into a report. It's essentially a way to gather potential customers. It's a great business strategy and they can't be faulted for doing it. But it's important to note.

Their conclusions of click fraud are reported to be consistently higher than other reports. The independence of their conclusions are probably compromised by the fact that they're behind it.

4:49 pm on Jul 22, 2006 (gmt 0)

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Any half brain programmer with a couple years expirience can make a clicking machine and a smart one wich would be practicaly indetectible.

The thing with click fraud is that it is obvious, those who cheat, cheat in a clear cut manner increasing their immpresions and clicks by the likes of 1000% in a couple of days.

[edited by: Dzordz at 4:50 pm (utc) on July 22, 2006]

6:42 am on Jul 23, 2006 (gmt 0)

WebmasterWorld Administrator skibum is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Seems like almost any research in this industry is purely used for biz dev and totaly suspect. Click fraud co. puts out a press release saying click fraud is huge. Big SEO company puts out study saying xx% of Fortune 500 companies don't have good meta tags, tracking company puts out study saying xx% of companies don't know how well their site converts. They sure do get lots of coverage from these studies.
10:42 pm on Jul 23, 2006 (gmt 0)



The thing with click fraud is that it is obvious, those who cheat, cheat in a clear cut manner increasing their immpresions and clicks by the likes of 1000% in a couple of days

A Webmaster World member once referred to a British study of prisoners in the UK that showed an average IQ of 80. The average person doing click fraud may not be much brighter, if we're to judge from some of the "I've been banned" threads in the AdSense forum. (One guy was dumb enough to protest his innocence using the same member name he'd used to start another thread where he'd bragged about his fraud activities.)

3:15 pm on Jul 28, 2006 (gmt 0)

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A major part of that $1.3 billion must gone to Google and Yahoo but hopefuly they will start caring about it more as i see a lot of complaints about invalide clicks lately
 

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