Adam Penenberg takes the US Federal Trade Commission to task for not doing more to prevent clickfraud in his Wired commentary, Click Fraud Threatens Web. It's not clear whether the FTC has actually had many complaints about this. The agency itself does comment in the article that it is more concerned with actions that directly impact consumers, rather than advertisers.
Clickfraud exists, no doubt about that. We've had panels discussing it at our SES shows since August 2002 and even started a dedicated session on the topic last year. Interest in that session has been growing. Here's a write-up of the most recent one held last August: Auditing Paid Listings & Click-fraud Issues.
The major search engines already do things internally to combat clickfraud. However, they could likely do more. A good start might be to actually participate in panels discussing the issue.
I've invited both Overture and Google each time we do one, and they always decline. Reason? They don't feel they can discuss the issue without giving away stuff that might help fraudsters. In reality, there's a lot they can and should say on the subject to better help advertisers protect themselves.
Heck, Overture provides some of this information on its site already: Advertiser Security. So does Google: AdWords click quality. Interestingly, neither make use of the word "fraud" in relation to clickfraud activity, preferring the more euphemistic "invalid click," as far as I can tell.
Penenberg's article makes mention of a recent report suggesting that 50 percent of paid clicks might be fraudulent. MediaPost has a write-up from last month about this: Pay-Per-Trick: Half Of All Ad Clicks Deemed Fraud.
It's a scary stat, but that's also for certain industry categories, which remain unnamed by the source of the data, Clicklab. That firm also specializes in clickfraud detection, so it's obviously in its interest for the stats to sound as scary as possible. But despite those qualifiers, as said above, there's no doubt clickfraud happens.
This issue is one that will only grow, as more money is spent on search and contextual advertising. If the FTC doesn't step in, if the search engines are unable to police better, rest assured the advertisers themselves will take action. Indeed, a rumor that I and others have heard over the past few months is that one or more advertisers may be considering filing a lawsuit against the search companies for failure to do more to stop clickfraud.
Another good article on this topic came out from News.com in July: Exposing click fraud. Also in July, SearchDay ran Advertising & Click Fraud by Jessie Stricchiola, who's spoken on the topic at our SES shows since 2002. Jessie also provides further tips on her own site: Click Fraud - An Overview.
Finally, complete your reading list with India's secret army of online ad 'clickers'. This article that came out in May is probably most responsible for raising new awareness of this preexisting problem.
Want to discuss this post or topic? Visit our forum thread: Click-Fraud said to be 50% of clicks
Meet Your Favorite Search Engine Watch Contributors
Many of SEW's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Thom Craver, Josh Braaten, Lisa Barone, Simon Heseltine, Josh McCoy, Lisa Raehsler, Greg Jarboe, Dan Cristo, Joseph Kerschbaum, John Gagnon, Eric Enge and more!