Google plans click-fraud blockade

Beginning next month, Google plans to give advertisers the ability to prevent their pay-per-click ads from being shown to competitors suspected of repeatedly clicking on the ads to drive up their cost.

Google, king of pay-per-click advertising, will allow advertisers to specify which internet protocol addresses will be blocked from receiving the ads. The move is designed to stop rivals from using so called click fraud to eat through a competitor's advertising budget, and to prevent them from bidding on the ad's keyword for the purpose of using it in their own ads. Fraudulent clicks can be generated by people paid to click ads over and over, and also through automated software programs.

Also beginning in March, Google plans to give advertisers more information on how much money they are saving by filtering out fraudulent clicks, according to a Google spokesman. Before July, Google will provide a standardised interface for advertisers to report click fraud and request investigations.

Companies that sell click fraud protection services say the industry is rife with click fraud. One study puts the rate for top-tier search engines at less than 12 per cent. Google claims click fraud represents a very small amount - a percentage that is in the single digits - of total clicks, and says it catches nearly all of it before customers get charged.

It has said that less than 10 per cent of all clicks on ads it serves are dubious in nature and it does not charge advertisers for those. Google provides refunds to customers who request them because of suspicious clicks for less than 0.02 per cent of all clicks, the company said.

Both Google and Yahoo! have settled lawsuits over the issue. Those companies are working with the Interactive Advertising Bureau and others to establish guidelines for quantifying click fraud.

Elinor Mills writes for CNET News.com