Report: Click Fraud Up to 15.8% Last Quarter

According to the latest Click Fraud Index report from Click Forensics, the overall industry average pay-per-click fraud rate rose to 15.8 percent for the second quarter of 2007. This is an increase from 14.1 percent for the same quarter in 2006 and 14.8 percent for Q1 2007.

On content networks, such as Google AdSense and the Yahoo Publisher Network, the click fraud rate was 25.6 percent. That’s up from 21.9 percent for Q1 2007.

“A significant percentage of today’s click fraud traffic can be attributed to two growing areas of concern for search advertisers: traffic that comes from botnets and from parked domains or made-for-ad sites,” Tom Cuthbert, president and CEO of Click Forensics, said in a statement. “Advertisers running campaigns on content networks are especially vulnerable as they are increasingly targets of this growing pool of savvy fraudsters.”

Click Forensics’ numbers come from the Click Fraud Network, a group of publishers organized by Click Forensics to share PPC data from both large and small companies.

Preliminary data from a study of click fraud by Fair Isaac Corp (FIC) showed that, in the limited cases it was able to study, 10 to 15 percent of billed pay-per-click traffic was deemed “pathological,” indicating a likelihood of click fraud.

According to Google and Yahoo, the actual click fraud rate is much lower. In March, Google reported that “under 10-percent” of clicks could be categorized as “invalid clicks,” which Google catches before advertisers are charged. The amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent. Also in March, Yahoo reported its “network discard rate,” representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent.

Click Forensics’ 15.8 percent rate would compare to Google’s “under 10 percent” number. Click Forensics does not offer a corresponding number to Google’s “less than 0.02 percent” figure of invalid clicks that are billed to advertisers. That’s the number that Fair Isaac’s numbers would correspond to.