Click Fraud Up In Second Quarter

    July 19, 2007

Click Forensics has released pay-per-click (PPC) fraud figures for the second quarter of 2007.

The overall average click fraud rate was 15.8 percent for the second quarter of 2007. This was an increase from 14.1 percent in 2006 and 14.8 percent for the first quarter of 2007.

The average click fraud rate of PPC advertisements on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 25.6 percent. That is an increase from 21.9 percent for the first quarter 2007 and 19.2 percent for the fourth quarter of 2006.

There was twice as much traffic from botnets in the second quarter as there was in the first quarter, which was a significant factor in the increased click fraud rates.

In the second quarter the largest percentage of click fraud from outside the U.S. came from France (5.1 %), followed by China (3.2 %) and Australia (3%).

"We’re not surprised to see the industry average click fraud rate climb this quarter as a result of botnet activity," said Robert Hansen, CEO of SecTheory and one of the industry’s leading experts in online security threats.

"Our clients are well aware that botnet activity is on the rise and that botnets are being used for a variety of online fraud activities, including click fraud."

The FBI recently reported that botnets have compromised over 1 million U.S. computers. Their sophistication and growing numbers are making it more difficult for search engines to flag click fraud coming from these sources.

"Click fraud has become the new spam and it’s clearly a problem that is getting worse, not better," said Tom Cuthbert, president and CEO of Click Forensics, Inc.

"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. Advertisers running campaigns on content networks are especially vulnerable as they are increasingly targets of this growing pool of savvy fraudsters."