The Real Problem with Click Fraud

I have been reading Henry Blodgett’s blog Internet Outsider for the last few months.  His most recent post is called, “The Real Problem With Click Fraud”.  It is well written and right on, for the most part.  It raises an interesting point (that he has mentioned many times) that there is no real data in defining the click fraud problem.

The core of the issue is indeed that “no real data” exists.  How big a problem is click fraud and is it growing? While we don’t claim to have all the answers I do believe we have a more statistically significant dataset than anyone else published at the Click Fraud Network site.  Our member base has grown significantly since the Network was launched a few weeks ago.  We are reporting that the instance of “high threat level” clicks is currently at 16.4%.  As our Network grows we will be able to announce threat levels by vertical market, search provider and other relevant subsets.  The industry will see that there is a big disparity across industries and providers.

Looking at individual campaigns or advertisers and trying to draw conclusions is pointless.  Our approach is to aggregate the data by providing our tool at no cost to the 90% of PPC advertisers who have less than 100,000 paid clicks per month.  This “collective intelligence” provides protection for them while helping the industry by revealing the scope and nature of click fraud.  Similar to the approach taken by spam filters or anti virus tools, the Click Fraud Network data powers the rating engine making our algorithm as accurate as possible.

Henry is on to something.  We want to help answer the questions.  Click fraud is not “immaterial”, so rather than speculate, let’s work together to peel back the onion.  Advertisers should Join the Network and let’s solve the problem.

The Founding of the Click Fraud Network

The problem of unwanted clicks is a real problem.  Publications from the Wall St. Journal to Inc. Magazine to Barron’s have discussed and debated this issue in great detail over the last year.  The reality is that click fraud is not going away on its own.  The Click Fraud Network™ was formed to address this issue at the highest level.  Funded by Click Forensics™, the leader in click fraud detection, we are focused on developing an industry solution to this growing problem.  Let me take a moment to share our point of view.

It’s true that there are two sides to every story.  The story of click fraud is no different.  Clearly online advertising is booming.  It has been great for everyone from mom and pop advertisers to Fortune 500 retailers to search engine providers.  Pay per click advertising is relevant, measurable and the wave of the future.  And just as the television and radio industries have gone through a maturation process, so is the case with online community.  Click fraud is a real threat to both the advertising community and the search providers.  We all want a level playing field, free from malicious attempts to beat the system.  But how do we all come together to solve this problem?

Search providers like Yahoo! and Google have been busy working to protect the investments of their clients, advertisers.  Both companies generate significant revenue from pay per click advertising and we believe both companies are sincere in wanting a solution.  The problem, however, is that the search providers lack the position and the data to do an accurate audit of paid clicks.  The position should be one of outside, independent, third party.  This is the approach taken with other media such as television (Nielsen) and radio (Arbitron).  The data is lacking because to accurately determine the intent of a click, you need to have behavioral data, not just the technical data.  Meaning that what a “clicker” does on the site is just as important as the technical aspects of that click.



So how should this problem be solved?  We are taking the lead on three specific initiatives:

1)  Create a community of advertisers to pool information, resources and ideas.  This is the genesis of the Click Fraud Network.  Members can discuss solutions, take advantage of free reports using our patent pending algorithm to track click fraud threat levels.  The network will publish the Click Fraud Index, a site dedicated to educating advertisers on industry trends and information.  We believe it does take a community to address the issue of click fraud.

2)  Define the industry standards for what an unwanted click looks like.  We believe that there are certain characteristics or attributes that are common to a large percentage of click fraud.  We are working with publishers and advertisers to agree on common ground and work together to expose it.  Once this is developed it should be published so that the entire community can benefit from it.

3)  Agree on a format to submit reports to search providers.  If we can improve the process of communication between the advertiser and the search provider, we believe that unwanted clicks can be identified much sooner.  This process would allow for improved identification of those trying to beat the system as well as a fair forum to be sure advertisers are getting what they pay for.

Click Forensics is investing heavily into our technology, the network and the solution.  We are committed to working with the entire advertising community to leverage our resources, relationships and process to build a better future.  The answers do exist and we look forward to having you participate in our community.  Thanks for taking time to consider your participation in the Click Fraud Network.

 

Tom Cuthbert 
President and CEO

Click Forensics, Inc.