August 2, 2006 6:42 PM PDT

Google, Yahoo, others team against click fraud

After numerous class action lawsuits and criticism from advertisers, the major Web search companies announced on Wednesday plans to work together with two industry groups to quantify click fraud.

Click fraud occurs when online ads are intentionally clicked on, either by Web sites who get paid for hosting the ads or by companies trying to deplete the ad budgets of rivals so they can buy the search keywords themselves and steal the business.

The Interactive Advertising Bureau (IAB) and the nonprofit Media Rating Council said they are teaming with Google, Yahoo, Microsoft, Ask.com, LookSmart and others to form the Click Measurement Working Group.

The group's mission is to establish guidelines for what constitutes valid clicks and invalid clicks on ads. Guidelines can help the industry measure how prevalent click fraud really is. Third-parties who sell click-fraud-combating services to advertisers claim that click fraud rates are as high as 30 percent. Google and Yahoo counter that click fraud rates are minimal.

The IAB said the guidelines will outline an industry-driven auditing and certification recommendation for search engines, online ad networks, third-party ad servers and other companies that make money from clicks. For example, Google's pay-per-click ad system requires advertisers to pay a fee each time one of their online ads is clicked.

IAB chief Greg Stuart couldn't give a time frame for when guidelines might be set, but said the group is hoping to hold its first meeting by the end of this month.

"It took us 14 months to do impression guidelines," Stuart said, referring to industry work that relates to audience measurement for online banner and display ads.

Shuman Ghosemajumder, Google's business product manager for trust and safety said, "We've been working to improve transparency about invalid clicks for our advertisers, and we're pleased to join an industrywide effort with the same goal."

The newly formed group will "ensure that marketers of all sizes are provided the highest possible level of transparency around pay-per-click advertising," John Slade, senior director of Yahoo Clickthrough Protection, said in a statement. Slade also said the guidelines "will be a game-changing step in measuring and fighting click fraud."

Brian Kabateck, an attorney who represents plaintiffs involved in lawsuits against Google, said he was "cautiously optimistic" when he heard about the new group. "Obviously, this is a significant issue that has to be addressed," he said.

Kabateck was one of a group of lawyers that challenged a $90 million settlement Google reached to settle a click-fraud class action lawsuit. An Arkansas judge rejected that challenge last week. Kabateck said he would appeal that decision.

Clarence Briggs, chief executive of Web hosting company AIT, which also has sued Google over click fraud and plans to appeal the Arkansas ruling, was more skeptical.

"Do I think the fox should guard the hen house?" Briggs said. He further questioned whether there can be "self-policing when all the incentive structure and the profit motive is there" for search engines to look the other way when it comes to click fraud.

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4 comments

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These guidelines will stop most clcik fraud
The search engines already catch the vast majority of obvious click fraud performed by amateurs. I believe publishing the invalid click guidelines will stop most invalid clicks perpetrated by the professional fraudsters. They will be forced to use much less effective methods and turn the frequency way down in order to avoid detection. This is good news for advertisers.

My guess is that the guidelines will provide a range of potential behaviors that could indicate an invalid click. No one measurement will definitively prove click fraud. But taken together a pattern develops that everyone can agree on.

There will always be a small amount of click fraud that avoids detection. Infrequent clicks using random methods on low dollar ads will occasionally get through. But, compared to broadcast advertising or magazine and newspaper advertising, Internet PPC (Pay Per Click) advertising is much more cost effective and trackable.

I wrote a blog on this subject today at <a class="jive-link-external" href="http://dondodge.typepad.com/the_next_big_thing/2006/08/google_yahoo_ms.html" target="_newWindow">http://dondodge.typepad.com/the_next_big_thing/2006/08/google_yahoo_ms.html</a>
Posted by Don_Dodge (64 comments )
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more click fraud needed
then maybe I won''t get so many adverts ruining my surfing experience. I hate the mouse rollover ones that are placed so that you essentially have to roll over them unless you pay special attention and avoid going anywhere near them.

Click fraud that forces businesses to decrease the amount that they screw with my surfing soujnds pretty good to me.

Maybe I'll set up some older computers as bots to roam around and click and close ads in the war against adverts.

lol
Posted by The user with no name (259 comments )
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Click Fraud Way Worse Than 30 percent
I'm glad they are acknowledging that click fraud goes beyond "clicks from the same IP address". Fraudsters moved beyond that tactic eons ago. If you really put the measures in place, it becomes apparent that click fraud is way worse than 30 percent.

You'll notice a tremendous spike from countries such as India, Hungary, Moldova, etc. You'll notice that nobody EVER goes beyond the home page. If you place a little 1 pixel graphic to load after 1 second, you'll notice that frightfully few PPC visitors load that pixel. On the most competitive keyphrases, I have experienced click fraud in the 80-85 percent range.

Mark@Viralinks
Free Link Building E-Course at www.viralinks.com
Posted by 208mbrandon (23 comments )
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Let;s not forget
PTRs, and such. An army of people paid a fraction of a cent to search.
Posted by jsmith12 (24 comments )
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