Search marketers, Fair Isaacs to size up click fraud

LAGUNA BEACH, Calif.--Does click fraud have a sense of humor?

Just type in: "earn rupees clicking ads" (or ruppies, for that matter) in a Google search box. The results turn up Google ads for a slew of businesses promoting--and likely making money from in order to advertise--the practice of fraudulently clicking on text ads in Google search results in order to inflate commissions paid to marketers.

Ironic, no doubt, but David Smith, CEO of ad-buying agency Mediasmith, said it highlights a complex and ongoing problem that the search giants won't properly divulge. Smith, who spoke at an advertising panel here at the Piper Jaffray Global Internet Summit, said he believes click fraud accounts for between 15 percent and 20 percent of search-related advertising revenue. But that's not a new figure, and it's one that was openly doubted by Piper Jaffray search analyst Safa Rashtschy.

Industry executives estimate the problem to be in the range of anywhere between 1 percent and 20 percent, depending on their suspicion level and particular stake in a search-advertising economy worth billions of dollars.

On Tuesday, Dana Todd, the president of the Search Engine Marketing Professionals Organization (SEMPO), said that the trade group has teamed up with Fair Isaacs, an independent company that tracks credit card fraud, to measure the true size of click fraud and its affects on search-engine advertising. Todd said in an interview that the partnership will also come up with a methodology to fight click fraud.