butterfly X online marketing

Shared by jeanvonoertzen
interesting figures about click fraud in SEM/PPC and good points by the author, how to interpret these figures.

Click Forensics SaaS solution measures traffic quality and click fraud across a community of advertising networks by applying data mining techniques to click behaviour to identify outliers.  The Click Fraud Index reports this click data from PPC campaigns across all the leading search engines. The report for Q4 2008 shows that click fraud is on the rise. The overall industry average click fraud rate grew to 17.1% in Q4 2008 up from 16.0% in Q3 2008. This is the highest click fraud rate recorded to date since Click Forensics began tracking click behaviour in April 2006. Click fraud has consistently plagued content networks since at least Q4 2008 with nearly a third  (28.2%) of all clicks on Google AdSense and the Yahoo Publisher Network being fraudulent.

Us Canucks seem to be the biggest clickers committing fraud with 7.4% of click fraud activity occurring outside the U.S. originating in Canada, followed by Germany (3.0%), and China (2.3%).

“Based on the data we tracked in Q4 2008, it seems that the online advertising industry is not immune to the growing tide of cybercrime during this recessionary period,” said Tom Cuthbert, president of Click Forensics. “Both the overall click fraud rate and the rate of click fraud originating from botnets were the highest ever in Q4 2008. In addition, we’ve started to see old schemes like click farms reemerge. Advertisers should pay close attention to these types of threats in their online campaigns throughout the year.”

Search is the core of Google and search advertising revenues from AdWords and its Content network are its most profitable channels. Overall, search advertising represents 40% of all online ad spending and with Google owning approximately 70% of the SEM market share, Google was quick to respond to the report.

When asked, a Google spokeswoman said via email that, “These estimates continue to count clicks Google does not charge to advertisers as fraudulent, so they are not actually click fraud estimates.” The statement takes aim at the Click Forensics report when she continues,

“Furthermore, their estimates have never reflected the invalid click rates we see at Google, which we have previously stated have remained in the range of less than 10 percent of all clicks every quarter since we launched AdWords in 2002.”

The debate will no doubt continue to rage on and that Google will do what it takes to protect its cash cow. It’s a little unsettling when Google is both judge and jury. Its near monopoly on search makes it difficult for any advertiser to ignore. Accountability and transparency are the hallmarks of this industry and the ability to measure and track ROI so precisely is what makes it so appealing as a marketing channel. This doesn’t appear to be the case regarding click fraud. Defining what click fraud is and is not seems to be a logical first step. In previous statements, Google maintains that only 0.02% of all clicks are reactively detected as invalid (read as 0.02% click fraud rate that negatively impacts advertisers).
In Google We Trust?