Search giants unite to crush click-fraud

03-08-2006

by Charlie Taylor

Search-engine rivals Google, Microsoft and Yahoo are putting their differences aside in a bid to stamp out click-fraud.

The internet firms are joining with the Interactive Advertising Bureau (IAB), an organisation which represents over 250 firms engaged in online advertising, and the Media Rating Council, to create a set of guidelines on what constitutes valid and invalid clicks on ads.

Click fraud occurs when online publishers repeatedly click on ads on their own site to boost revenue, or conversely, when they click-through on ads paid for by competitors in a bid to drain their marketing budgets.

Earlier this year, e-security experts at the SANS Institute uncovered evidence that networks of compromised PCs are increasingly being used to click on banner ads, in order to generate revenue for unscrupulous publishers.

Click-fraud has also become increasingly problematic for companies which charge advertisers on a 'pay-per-click' basis. Although some search engines have refrained from discussing the phenomenon publicly, Google has admitted it has had problems with click fraud. The search giant recently paid out USD90 million to advertisers who instigated legal action against the company for overcharging advertisers for fraudulent referrals.

Following the legal settlement, Google announced that it has tweaked its AdWord system so that advertisers can now monitor the number of invalid clicks on their ads.

Yahoo also found itself in court in California recently for its failure to protect advertisers from false click-throughs. It ended up shelling out USD4.5 million in legal bills for the plaintiffs, and agreed to settle advertiser claims dating back to 2004.

According to recent statistics from Click Forensics, 14.1 percent of recorded mouse clicks on ads are bogus. While virtually all search engines have policies for not charging or for refunding advertisers who can prove click fraud, defining what exactly constitutes fraud is problematic.

The new guidelines being established by the Click Measurement Working Group will provide a detailed definition of a 'click' and they are intended to provide marketers with a standard for the consistent and reliable measurement of performance-based marketing.

The IAB said independent auditing against the complete guidelines should provide advertisers with added security for their internet advertising investment, and further solidify the increased level of accountability and transparency already established.

"These guidelines demonstrate our continued commitment to being the most accountable advertising medium and providing marketers with the highest possible level of transparency," said Greg Stuart chief executive of the IAB.