Saturday, July 22, 2006
-Research claims that advertising fraud is on the rise
Tim Smith, Computeract!ve 21 Jul 2006
We are indebted to the pioneers in this industry who have taken it upon themselves to research into click frauds in order to stem the tide, and also reduce the waste of advertisement campaign budgets that the "Click Mice" greed seek to devour.
A report by Click Forensics has claimed that so-called click fraud is on the rise, potentially undermining the way many free sites are supported.
Click Forensics claimed that more than one in 10 responses to online advertising is not authentic, and the number is growing.
Online advertising differs to paying for a space in a magazine because the advertiser only pays when someone clicks on the advert to visit their website.
Many websites are supported purely by advertising rather than charging visitors.
In schemes such as Google AdSense, the owner of the website receives some of the money. Google AdSense is not limited to companies; many personal websites use the service.
Google responded with a statement saying that it is confident with the way it manages click fraud and that it is only a small problem.
Richard Firminger, Regional Sales Director for Yahoo Search Marketing, went further and strongly denied that the extent of click fraud was anything like that reported by Click Forensics. He admitted that click fraud is a serious matter but was confident that the technology that Yahoo uses catches the fraudulent clicks.
He added that if the Click Forensic figures were correct, it would imply millions of fraudulent clicks every year.
According to Mr Firminger, click fraud is sometimes used by companies to deliberately cost competitors money.
Yahoo recently had to pay out $5m to a company that claimed not enough had been done to protect against click fraud.
A representative for the Direct Marking Association disagreed, saying that there have been reports putting the extent of click fraud even higher than that claimed by Click Forensics.
He estimated the cost to the advertising industry at $1.3billion a year, of which $500 million was lost business. There is a need for an independent body to monitor click fraud but the industry is still very new. He did reassure Computeractive that there is no direct impact on small website owners.
A representative for Hitwise, a company that also monitors web activity, explained that there are various ways to spot and discard fraudulent clicks. These include looking at the length of time spent on individual websites and the number of visits.
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