Google, Yahoo Facing Click Fraud Pressure

    September 22, 2006
    WebProNews Staff

A lengthy look at the issue of click fraud, where search advertising companies and site publisher networks profit from bogus ad clicks that cost advertisers real money, indicated a light is at the end of the tunnel when it comes to confronting the problem.

Unfortunately for Google and Yahoo, that light at the end of the tunnel is a 220 million pound freight train bearing down on them. It’s the Click Fraud Express; BusinessWeek substantially examined the click fraud issue.

It doesn’t bode well for those who profit by the billions from those little contextual ads appearing on millions of websites. Claims by the search companies that click fraud is an issue they have under control, and that they detect the majority of bogus clicks, have not satisfied online marketers:

In late September a coalition of such major brands as Expedia Inc.’s 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.

“You can’t blame the advertisers for being suspicious,” says Robert Pettee, search marketing manager for LendingTree, based in Charlotte, N.C. “If it’s your money that’s going out the door, you need to be asking questions.” He says that up to 15% of the clicks on his company’s ads are bogus.

Search expert Danny Sullivan commented on a telling part of the story – an open admission of click fraud by people who have used it for profit:

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!

One person from inside the industry said in the article that click fraud is here to stay, Sullivan noted:

“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.”

Much of this click fraud originates from outside the United States. It has come home to the search companies to roost. The clamor for greater transparency looks like it could overcome the contention that transparency equals a road map for the bad guys to commit fraud.

The fraud seems to be happening today. Transparency may lead others to try to find the weak points, but it also gives advertisers the information they need to look for attacks that exploit those weaknesses. Both Yahoo and Google make heavy use of open source technologies that benefit from being open for others to pore through them for potential problems.

They need to consider a similar approach for the advertisers who enrich the search advertising industry.

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David Utter is a staff writer for WebProNews covering technology and business.