New Click Fraud Numbers: But Can You Trust Them?

There’s new click fraud numbers out from Click Forensics indicating that click fraud is on the rise.  In fact, according to the study, click fraud on high-value keywords could be as high as 20%.  The overall industry average click fraud rate for the fourth quarter was 14.2%.  According to the report, the average click fraud rate on PPC ads on search engine networks was 19.2% for the fourth quarter of 2007.

In the report I saw it didn’t indicate which search engine networks this number was coming from.  I would have to assume that this includes both first-tier and second-tier search engine networks.  Some further data around this would be helpful, as my suspicion is that a majority of the click fraud being reported by Click Forensics is likely to coming from second-tier networks that don’t have the same stringent click fraud filtering mechanisms in place as Google, Yahoo and soon to be newcomer to the space, Microsoft.

Andy Beal casts doubt on these numbers in his blog, making the salient point that you have to remember they’re coming from a company that has a vested interest in the growth of click fraud.  Also Click Forensics sample includes only companies that are concerned enough about click fraud to actually use Click Forensics to monitor fraudulent activity on their sites.  One has to assume that these companies would be especially vulnerable to click fraud and are not an accurate representation of the total universe of advertisers.  Like Andy Beal said, it’s a bit like going into a hospital and asking a number of people if they feel sick.

Perhaps it’s coincidence, but about the same time that this report was coming out, Danny Sullivan had a conversation with Shuman Ghosemajumder at Google about their concerns on some of the click fraud reporting that’s coming from companies like Click Forensics.  Apparently one of the main points of contention is around the use of the back button on a browser.  I had previously talked with Shuman about some of the reported numbers around the click fraud issue in their concern about inflation of those numbers.

Regardless, at this point it looks like we’re still going to be grasping at straws when we try to put scope around the click fraud issue.

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