Written on September 30th, 2004 at 03:09 pm by Darren Rowse

Pay-Per-Trick: Half Of All Ad Clicks Deemed Fraud

Advertising 1 comment

‘Pay-per-click (PPC) advertising models, which compensate networks or their affiliates each time a user clicks on a link, were always considered to be something of an honor system. But new data coming to light this week reveals that PPC fraud is far more significant than many industry observers would have imagined.

According to research released by Web analytics provider Clicklab, fraudulent clicks can account for more than 50 percent of all advertising fees attributable to certain categories.

The data provides a rare public snapshot into a segment of the industry that is controlled and rarely disclosed by companies that manage their own proprietary databases. And while a big player like Google, for example, does not disclose its fraud rates, the problem is significant enough that Google underlined it in its IPO filing with the Securities and Exchanges Commission as a potential risk that investors should worry about.’

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One Response to “Pay-Per-Trick: Half Of All Ad Clicks Deemed Fraud”

  • Until Google or Yahoo! actually own up and publicly state what the exact number of fraudulent clicks they see is, most claims are pretty much stabs in the dark. How does Clicklab know, for instance, how many of the visitors on a website which were identified as fraudulent click were actually visitors that were paid for? Google supposedly often discounts such clicks before reporting them and charging users for them, so it could well be that you dont pay for all 50% “fraudulent” clicks anyways, in which case, who cares?

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