An increasing number of online advertisers are seeking help from a new group of businesses that have cropped up to take on “click fraud,” in which people maliciously click on a Web-search ad.
Hundreds of thousands of advertisers contract with search engines such as Google and Yahoo to serve up small text ads to anyone searching the Internet using certain key words. Each time someone clicks on an ad, the marketer pays the search engine a fee. The market is estimated at around $4 billion in the
U.S.
in 2004 and growing.
But it is increasingly apparent that some people, either manually or by using computer programs, click on these ads to run up fees for competitors, boost the placement of their own ads, or make money for themselves, with some estimates placing fraudulent clicks as high as 20 percent of all clicks. Many advertisers complain that search engines have come up short in tackling the problem. As reported in the April 12, 2005, issue of AdvertisingLaw@manatt, two small advertisers have taken the issue to court. The suit alleges that search companies knowingly charged them for fraudulent clicks.
Detecting a business opportunity, any number of small companies have cropped up to deal with the click fraudsters. With names such as Click Defense, ClickFacts, ClickDetective, and WhosClickingWho, they generally monitor records of visitors who come to their clients’ Web sites via search ads. To ferret out fraudsters, they rely on such clues as the numerical addresses that computers provide when they connect. When someone clicks multiple times on the same search ad, the
service
can display on that person’s screen a pop-up message indicating it is tracking him or her. It can also provide detailed reports advertisers can use to request refunds from ad providers.
Yahoo and Google each has its own system designed to detect click fraud before an advertiser is charged. But citing privacy issues and a desire not to alert fraudsters to the surveillance techniques, the search engines generally won’t give advertisers details about how they handle specific suspect clicks. That can make it tough to reconcile analyses performed by third-party
service
s with what clicks the advertiser paid for.
Advertisers themselves can monitor the effectiveness of their ads by using free
service
s from the search companies that help determine what portion of clicks generates customer sales. They also can scour the records kept by their own Web servers. But small advertisers in particular often say they don’t have the time or technical expertise to hunt for traces of click fraud with those tools.
Significance: With some online advertisers paying up to $100 per click, click fraud can represent a real concern. But the anonymity of the Internet can make it tough to detect click fraud, let alone find and prosecute or sue the fraudsters. The monitoring
service
s offer a tool—albeit not a perfect one—for tackling the problem.