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BusinessWeek's Good Look At Click Fraud

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Via Micropersuasion, Click Fraud is a BusinessWeek cover story on, well, click fraud. What's new from stories we've already read and read and read about click fraud before? Lots, ranging from a new advertiser pressure group, to an industry estimate that click fraud is 10 to 15 percent, along with a couple outing themselves as fraudsters. It's well worth a read. Here are some highlights:

BusinessWeek talks about its investigation coming up with "paid to read" rings, spread out in a way to presumably avoid detection. We get a named Minnesota couple talking about how they "dabbled" in click fraud to earn $5,000 over four months by setting up sites with Google and Yahoo ads, then paying other people to click. Ouch -- not a good thing for either company to have someone flat out admitting. Not sure the wisdom of that couple stepping forward, either!

Further down, BusinessWeek suggests clicks aren't a good measure of consumer interest:

Google and Yahoo are grabbing billions of dollars once collected by traditional print and broadcast outlets, based partly on the assumption that clicks are a reliable, quantifiable measure of consumer interest that the older media simply can't match.

Actually, it's still a fairly good assumption. That's because clicks can often be related to a conversion action -- a purchase. If you're getting a lot of clicks but no conversion, you might have a bad pitch, bad product or bad clicks due to click fraud. Unfortunately, many marketers won't know any of this due to the failure to measure conversion at all. Add in conversion tracking, and you have a one-two punch that makes these type of ads so powerful.

The story gives us a new estimate for click fraud, 10 to 15 percent:

Most academics and consultants who study online advertising estimate that 10% to 15% of ad clicks are fake, representing roughly $1 billion in annual billings.

Maybe. Maybe not. Those the reporters talked with aren't named. I've continued to hear ranges that go from practically nothing (what the search engines say, and they do have to be counted into the estimates) to as high as 50 percent. I've not heard anyone agreeing on a particular range.

BusinessWeek says some big brands will push on click fraud later this month:

In late September a coalition of such major brands as InterActive Corp.'s (IACI ) Expedia.com travel site and mortgage broker LendingTree is planning to go public with its mounting unease over click fraud, BusinessWeek has learned. The companies intend to form a group to share information and pressure Google and Yahoo to be more forthcoming.

Ironically, IAC's various units such as Ask sell pay-per-click ads themselves, nor have I see anyone suggest that Ask is somehow immune to click fraud. Frankly, people probably haven't looked at it much simply because the overall sales and volume are much less than at Google or Yahoo.

We've got a former anonymous Yahoo manager saying click fraud can't be stopped:

"Advertisers should be concerned," says a former Yahoo manager who requested anonymity. "A well-executed click-fraud attack is nearly impossible, if not impossible, to detect."

Google, which usually gets the brunt of click fraud criticism I'd say, gets a small reprieve from one advertiser:

Google, he says, does a better job than Yahoo of screening for fraud. But neither adequately protects marketers, he argues.

That advertiser does the drill down that often is so much better at illustrating click fraud than the general talk about it:

How, he wants to know, did he receive traffic this summer from PCs in South Korea which are clicking on insurance1472.com and insurance060.com? The only content on these identical sites -- and five other clones with similar names -- are lists of Yahoo ads, which occasionally have included MostChoice promotions.

The story then goes into the idea of "recycled" ads -- IE, contextual placements that can range from domain parking services to sites that simply scrape search results as if they are presenting "new" content.

We get a deeper look into an alleged pay-to-read ring:

He owns about 20 paid-to-read sites, he says, as well as 200 parked sites stuffed with Google and Yahoo advertisements. But he says he will take down healthinsurancebids.com to avoid discovery. He claims to take in $70,000 in ad revenue a month, but says that only 10% of that comes from PTRs.

BusinessWeek then joins some of these rings:

BusinessWeek reporters received a torrent of e-mail showcasing hundreds of parked sites filled with Google and Yahoo ads. The groups urged participants to click aggressively on ads.

And interviews a former pay-to-reader:

At one point, she says she belonged to as many as 50 such sites but earned only about $200 all told. More recently, she says, most PTR sites have dropped the pretense of caring whether members are interested in the sites they visit.

Google and Yahoo are cited as saying they filter this stuff out.

Of course, further down in the story, I want to scream at one of the advertisers to just stop advertising outside Google itself:

But as clicks from ZapMeta kept arriving, Fleischmann demanded in an Aug. 7 e-mail to Google: "You should be trusting us and doing something about [ZapMeta] as a partner, instead of finding more ways to refute our data or requests."

The advertiser could easily restrict ads to only show up on the Google search network, which would eliminate the domain and contextual driven traffic that can be so problematic. He'd get less traffic, but he'd also get less frustration.

Then again, his frustration is well understood and a big warning to the major ad networks. As they've gotten bigger, they're more vulnerable to this type of gaming. One way of combating it is the off heard cry to allow more exclusion of particular sites across the network. Google has done a lot here, but more could come. Yahoo seems to have much further to go.

Don't miss the extras that go with the story:


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