Report: 14.6% of All Search Ads Are Wasted

There's an old expression in the advertising business: "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." It has traditionally been applied to display advertising, not search. Contextual search ads are supposed to be a panacea for wasted ad dollars. Well, they're not.

According to a new study, advertisers lost $800M last year to click fraud. On average 14.6 percent of all clicks are fraudulent, and 75 percent of advertisers say they have been victims of click fraud at one time or another.

The click fraud issue has been well documented. Talk to Mark Cuban. He knows it's a big problem. But do advertisers? Everyone's rushing towards search marketing (not to mention Google stock) like it's the new black. Search marketing is great, but guess what? Just like any other form of advertising, a lot of it is wasted and the numbers appear to be more substantial than perhaps most think.

So is search marketing's shine waning? Now I am biassed. However, my belief is that if marketers continually experience 14% waste in a medium that's known for targeting they will seek out alternatives. Couple this with the growing need to engage in human dialogue and you get dollars flowing towards PR. Don't believe me? It's already starting. Read Jonah Bloom's column in this week's AdAge.