Insight into the Jump in Click Fraud

This morning, Click Forensics released the Click Fraud Index numbers for Q4 2008.  The overall rate jumped to 17.1%.  This means that across our community of advertiser data, we find that one out of every six clicks are invalid and not worth paying for.  There were three factors that drove the increase.

[caption id="attachment_303" align="alignright" width="300" caption="Source: Click Fraud Index"][/caption]

First, the increase lines up with past increases in Q4, somewhat of a seasonal bump.  This year however, was magnified by the economic downturn and a correlating increase in cybercrime.  I wrote about this last week.

Secondly, there was a 14% increase in the botnet rate, surpassing 30% for the first time.  There have been quite a few reports from McAfee, Symantec and others noting a similar trend.  Botnet attacks are becoming more sophisticated and difficult to stop.

Finally, for the first time in awhile, we saw an uptick in click farm activity.  Unfortunately, there lots of sites that pay people to click on ads.  This type of activity is difficult to catch and unfortunately, advertisers lose when this occurs.

While the jump is alarming, there is a growing current of cooperation to address the problem.  At Click Forensics, we continue to work with advertisers, agencies and ad providers to build solutions to ensure advertisers get what they pay for.  

Coverage of the news can be found here:

CNET

WebProNews

MediaPost

TechCrunch

New York Times 

Search Engine Land 

Search Engine Watch 

Tom

Getting an Uptick in a Downturn

It's no secret our county’s economy is slowing and times are getting tough.  While there is great optimism, there is an undercurrent of concern.  In anytime of economic downturn, one unwanted byproduct is that crime increases ("Statistics point to increase in crime").  Unfortunately, this includes cyber crime and specifically, click fraud.

For almost three years now Click Forensics has been tracking click fraud.  While the overall rate somewhat stabilized during 2008, the number of advertisers affected and the dollars lost continue to rise.  As we face more sophisticated attacks in 2009, I wanted to highlight some recent advances in the battle and share some specific steps advertisers can do to ensure they get what they pay for.

Cooperation has been a theme for 2008.  Progress is being made on three fronts by leaders in the industry.  First, the Interactive Advertising Bureau (IAB) continues its work on defining guidelines for counting clicks.  Click Forensics continues to take an active role in this important effort and supports it as a good first step.  Secondly, leading search providers, including Google and Yahoo!, have enhanced their products with better tools to manage campaigns and announced traffic quality centers to provide additional resources to advertisers.

The third initiative has been the joint effort of Click Forensics and Yahoo! to build the FACTr process (Fully Automated Click Tracking Reconciliation).  For years, advertisers have been frustrated when they have found invalid activity in their pay per click campaigns.  Now there is a simple, automated process that connects advertisers to the ad providers.  The FACTr system was built by Yahoo! and Click Forensics and launched publicly in July of 2008.  By the fall, other ad providers including LookSmart, Miva and Google were added.

While progress continues, here are specific steps advertisers can take to protect their online investment.  First, advertisers should monitor campaign performance at the most granular level. Click fraud attacks come in spikes of activity.  By watching campaign performance on a daily basis, advertisers can see anomalies and alert the ad provider quickly.  Looking for spikes in clicks, drops in conversion ratios, and higher than normal impression levels are all signs something may be out of line.

Secondly, now is a good time to double check campaign settings.  A large number of unwanted clicks come as a result of campaigns not being set up correctly.  Look at geo-target settings to ensure they match your campaign goals.  Review day part settings to ensure you have optimal ad delivery for delivering quality traffic.

Finally, avoid paying for clicks from low quality traffic sources.  By utilizing the site exclusion functionality made available by ad providers, you can block bad clicks from ever getting to your campaign.  Click Forensics has a process called, Intelligent Exclusion™ that dynamically identifies bad traffic sources and eliminates them from the campaign.  We see a 43.5% decline in the overall invalid rate for advertisers who use this process.  Keeping the money in your pocket is always better than having to go back and ask for a refund!

Like you, we are hopeful that the economy will make a quick recovery.  As it does, we will all benefit.  In the meantime, it’s more important than ever that advertisers are on the lookout for threats to their ad budgets.  You can count on all of us at Click Forensics to continue to work on behalf of the entire industry to bring solutions to the marketplace to ensure advertisers get what they pay for.

Tom