Is click fraud a growing danger for marketers, or is it all just a myth? Recent estimates have placed fraudulent clicks at nearly 20 percent. But does that mean it's more of a problem, or just more easily detected?
Click fraud has gotten a lot of press lately, and it seems that in the search world, click fraud is the gift that keeps on giving. Like any plague upon humanity, it seems we only pay attention to it when a flair-up appears.
For the un-indoctrinated, in search engine advertising, advertisers pay for every click they receive. The growth and continued popularity of cost-per-click (CPC) advertising in directive search and contextual search (ads appearing in search results and near content) is a boon to the industry, but has also birthed an unusual sort of conundrum.
Click fraud costs advertisers millions of dollars each year. Though no one is certain of the exact size and scope of the issue, The New York Times recently reported that search giants Google and Yahoo have vastly different perspectives on the problem -- and, therefore, different estimations of how much of a problem for marketers it actually is.
Here's what we do know: In the new economy of desperation, click auditing firms are proliferating. The claim that fraudsters are becoming more and more desperate may or not be valid, but at least one thing is certain: Click fraud is not just a search advertising problem anymore.
Past and present
Fraud is a difficult word in that it implies that a crime has occurred. The generic label of "click fraud" is associated with any type of click that's invalid, but as measurement of online traffic has matured, the concept of a click that is not accurately delivered is not the catch-all label it once was.
Today, we refer to clicks as either "valid" or "invalid." (For specific definitions of the types of click fraud, take a look at my previous iMedia article on the subject) In the not so distant past, lawsuits were initiated against pay-per-click media providers -- class actions, if you will -- targeted at the deepest pockets: Google and Yahoo specifically. As is often the case with class action litigation, lawyers get richer, advertisers get slightly wiser and the needle of progress moves just a bit.
The outcome of past litigation? Advertisers waived the right to litigate for past lost revenues, industry organizations woke up to the click fraud problem and third parties that audit click activity on behalf of advertisers began to proliferate.
Just about three years ago, the Interactive Advertising Bureau began working on an addendum to its existing ad impression measurement guidelines of 2004 in attempt to officially define a click. In mid may, 2009, the IAB released said defining document.
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