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Click fraud soaring on Google and Yahoo!
Pay-per-click... but who's doing the clicking?

By Will Sturgeon

Published: Tuesday 18 July 2006

The amount of click fraud taking place on search giants such as Yahoo! and Google has increased since the beginning of the year, despite efforts to curb the practice.

Click fraud happens in pay-per-click online advertising when people or computer programs click on an advert and imitate legitimate users. This generates a fraudulent charge per click to the advertiser. Click-fraud scams can be perpetrated either by competitors trying to deplete rival marketing budgets, or by the advertisers themselves wishing to push their adverts up the search rankings.

According to a report published by click-fraud reporting service Click Forensics, the click fraud rate for tier one search providers, including Google and Yahoo!, rose from 12.1 per cent in the first quarter of the year to 12.8 per cent in the second quarter.

For high-priced search terms — those that generate more than $2 per click, and which often make up the majority of an advertiser's total spend — the click-fraud rate over the industry was 20.2 per cent, according to the Click Forensics survey of over 1,300 advertisers and agencies.

Tom Cuthbert, CEO of Click Forensics, said warned that those companies buying the higher priced search terms are unfortunately leaving themselves vulnerable to the greatest levels of fraud.

The overall industry average for click fraud rose to 14.1 per cent in the second quarter, from 13.7 per cent in the first quarter. The greatest percentage of click fraud – more than 88 per cent, originated from North America.

Tom Espiner writes for ZDNet UK