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Ok, even by the most lenient of standards ClickForensics cannot be accused of unbiased impartiality when it comes to click fraud: after all, they offer products and services addressing that very bane of pay-per-click search marketing.

So when they chose to raise the hue and cry via their latest press release “Industry Click Fraud Rate Jumps Past 15 Percent in Second Quarter 2007” a few days back, it was only to be expected that the search advertising industry would react somewhat less than enthused, as this in-depth article by InfoWorld’s Matt Hines senior writer illustrates: “Much ado over click-fraud statistics”

Here are some of the ClickForensics press release report’s hair-raising findings:

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  • The overall industry average click fraud rate was 15.8 percent for Q2 2007. This is an increase from 14.1 percent for the same quarter in 2006 and 14.8 percent for Q1 2007.
  • The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 25.6 percent. That’s up from 21.9 percent for Q1 2007 and 19.2 percent for Q4 of 2006.
  • Traffic from botnets doubled from Q1 to Q2 2007 and contributed significantly to the increase in click fraud rates.
  • In Q2 2007, the greatest percentage of click fraud originating from countries outside North America came from France (5.1 percent), China (3.2 percent) and Australia (3 percent).

Yahoo! actually acknowledged the issues acording to InfoWorld:

We’ve dedicated significant resources to delivering high-quality traffic to our advertisers and have identified and not billed for 12 to 15 percent of the clicks on our network [as a result of click-fraud],” said Reggie Davis, vice president of marketplace quality at Yahoo.

Hold on – they’re actually admitting to some “12 to 15%” detected click fraud? At a projected $8.5 billion U.S. companies alone will spend on PPC in 2007 according to eMarketer, that would amount to a stately $1.28 billion overall click fraud revenue this year. And that’s just the fraudulent clicks they are aware of! Now if that isn’t creepy, we wouldn’t know what is!

While Yahoo! at least refrained from disputing the ClickForensics findings directly, Google, as usual, shifted into turbo denial mode:

The InfoWorld article states:

Google representatives contend, however, that Click Forensics is manipulating its numbers to make the rate of click fraud appear much higher than it actually is.

[…]

“This estimate counts clicks Google does not charge to advertisers as fraudulent, so it is not actually a click-fraud estimate,” Google said in the statement.

Media representatives at Google labeled the Click Forensics report as an intentional effort to generate fear and drive interest in its own ad performance tracking services.

(Emphasis is ours.)

So what’s new? Not that they seem to have tagged any precise number to their detected click fraud rate

As our loyal readers know – and our archives prove – here at fantomNews we’ve always adopted an adamant stance against click fraud. It’s costing advertisers their hard earned bucks, it’s a waste of resources and it’s arguably even a prime conduit of Negative SEO if deployed with the purpose of rapidly depleting competitors’ advertising budgets.

And, contrary to whatever antics the search engines’ spinmeisters may try to hoodwink their clientele with, it’s dead easy to implement: Botnets constituted by thousands of trojan-infected, hijacked zombie boxes, clickbots daisywheeling across a myriad of global proxies or even private networks on a slew of IPs and C classes, intelligent scheduling to tie IPs to geo location specific time zones, all set up in jurisdictions where none of this is deemed even remotely illegal – all this technology (and more) is available for the asking and makes it as easy as shooting fish in a barrel.

And there’s preciously little the search engines can actually do about it, either. Sure they will catch the more clueless, underfunded and essentially naive amateur outfits that couldn’t program a Winsock from scratch if their life depended on it.

But there’s plainly no denying that click fraud can be big, nay: huge money, arguably even more lucrative (at least potentially) – and certainly way less risky – than the drug trade.

So no matter the marketing Prozac the PPC networks may be doling out by the ton – if fifteen out of a hundred dollars you spend on PPC advertising will actually only serve to fill the coffers of organised crime and uncounted lonely wolf crooks, we would submit that all those comfy ROI projections you’ve been working from should be subjected to a thorough hard nosed reviewal.

Because this is one problem we can be certain won’t go away anytime soon…

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