BusinessWeek Publishes Big Investigation on Click Fraud

Click Fraud, the practice of generating automatic clicks on search ads, is becoming a significant threat to search engine advertising, according to a BusinessWeek cover story. The article exposes how Google and Yahoo are passively profiting from click fraud and, in theory, "have an incentive to tolerate it."

According to a BusinessWeek investigation, there's a thriving click-fraud underground populated that includes "paid to read" rings that click ads over and over again around the world. This is causing advertisers to get antsy and it poses a significant threat to Google and Yahoo.

My take on all of this is that advertising is clearly at a major crossroads. The old model of throwing stuff up there and seeing what sticks is dying. Search engine marketing, while certainly effective, can have its challenges too and clearly can be gamed. Over time, people are going to say "enough." They're going to want companies to engage them in conversation before they are convinced they should buy. This is why I believe we're about to enter the golden age of PR.

Tags: clickfraud

Comments

[KP Frahm]

Don't know if you already know/discussed this, but if it comes to click fraud and the vulnerability of the adsense business, check Google Will Eat Itself. Great fun ...

[Alan]

Steve

Google is watching for click-fraud patterns, and smart advertisers will drop the rates they are willing to pay if click-throughs don't turn into real business.

Becuase of this, won't the burden of click-fraud primarily be borne by advertisers that aren't paying attention to what they are doing?

[AL]

Clearly click fraud is a "concern", but this Business Week magazine cover reeks of big media vengence! An all black cover with the phrase "The Dark Side of Online Advertising"?! It gives enough negative visual clues so that reader has already forumlated an opinion without even reading the details!

Right now, the print advertising business is getting their lunch eaten by online ad revenues. BusinessWeek, an old media relic, is simply trying to poison the online ad waters! It's the same dynamic as when newspaper writers dismiss bloggers as "hacks" and "pajama wearing masses".

When was the last time BusinessWeek did a scare story on inflation of circulation numbers?!

[TourPro]

I know this might sound funny, but how exactly is this "fraud"? The business model that both Google and Yahoo uses has this really huge inherent flaw. If people can game the systme, then I feel it is the system at fault. Under what statute exactly would this fall under as a crime? If anything, the negligence that Google and Yahoo share in letting this flawed system continue is the real crime.

[nic mitham]

Not forgetting the issues of non-automate d click fraud - click from competitors.

But, holistically, my thoughts on combating click fraud actually involve google analytics.
Using the goal functionality with GA, you could set certain goals that you wish PPC visitors to get to. Once a referred visitor reaches a goal, you get charged. You could extend this by setting different click charges accordinlg to the type of goal reached. Click on a contact us button...£0.50 for example. Enter the check-out process...£0.75.

[Randy Charles Morin]

The article is a joke. It talks about click-fraud coming form certain countries. Since you can target AdWords by country, the source is either an idiot or a liar.

[Jitendra]

An issue not covered in the article is the issue of competitive click fraud. An example would be a company clicking on competitor's ads to drain their resources. I am not even sure that doing so will be illegal?

Another potential issue missed out in the story is spam blogs...

[Jason Whitman]

I also found that the article suggested AdWords users who do not know how to lock down their campaigns. Targeting countries and also turing off displaying ads on the content network would seem to solve many of the issues presented in the BW article.

[tim finin]

One of the easiest ways to set up a sites with ads that your "paid to read" gang clicks on is to establish a nest of splogs and automatically populate them with plagiarized content from other blogs. Companies like Google and Yahoo can benefit from better automatic splog detection. It might be possible to test this hypothesis by analyzing the frequency of splogs as a source of clicks for an advertiser. If anyone whould like to share their data we might be able to do such an analysis.

[David Kesmodel]

I've seen and heard several people -- like Alan -- claim that BusinessWeek and other historically print publications are interested in writing splashy stories about click fraud because their print franchises are under attack amid the online-ad boom. But that is absurd. Most print publications, including BusinessWeek, are increasingly dependent on online advertising and are putting a lot of money into their online editions. Many also make some money off pay-per-click advertising as well as display advertising.

[David Kesmodel]

Excuse me. I meant to flag Al's comment, not Alan's.