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Click fraud problem debated

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Some search executives say click fraud in search marketing is getting worse, not better; others contend things have improved over the past year.

Click fraud occurs when a person or a computer program clicks on an ad to generate a fraudulent cost-per-click charge.

Last week, the extent of the problem was debated by search engine executives and search marketers at the Search Engine Strategies conference in San Jose, Calif.

The major search engines have all increased their focus on click fraud in the past year.

Reggie Davis, VP-marketplace quality at Yahoo, said Yahoo has seen the rate of complaints from advertisers lessen on his watch. Davis was appointed to his post in March, the first senior executive at Yahoo to be fully dedicated to display and search listings quality, which includes all efforts to address click fraud.

This month, Davis’ group launched the Yahoo Traffic Quality Center, an online resource designed to help provide greater transparency as to what the engine is doing to help define, prevent and protect against click fraud. Davis said he is dedicated to improving communication, increasing transparency and providing advertisers control.

James Colburn, product manager, search strategy and adCenter go-to-market at Microsoft Corp., said that Microsoft’s adCenter features Click Quality Reports, giving advertisers better visibility into click quality.

Google’s efforts to combat click fraud include its just-introduced Ad Traffic Quality Resource Center and its Internet Protocol Address Exclusion, a product that allows advertisers to exclude IP addresses where advertisers don’t want their ads to appear. Google said it continues to develop new filters and systems used to detect invalid clicks.

One marketer who connects buyers and sellers of insurance and mortgages said he has seen improvement on the part of the search engines.

“Google and Yahoo both have gotten a lot smarter to determine fake clicks,” said Martin Fleischmann, president-CEO of MostChoice.com. “The market tends to solve these things if you let the market vote [and] if you allow people choice.” he added: “Google allows you to exclude certain sites that you don’t want to appear on. That’s the kind of power the market needs to be able to avoid the fake clicks.”

The reason this is important, Fleischmann said, is that click fraud “impacts the efficiency of the whole marketplace and the reliability of results.”

Tom Cuthbert, president-CEO of Click Forensics, a company that helps advertisers combat click fraud, said the average pay-per-click fraud rate jumped in the second quarter to 15.8%, from 14.1% in the same quarter last year, according to his company’s Click Fraud Index reporting service. He said the increase is due to increased use of botnets to perpetrate click fraud, as well as so-called “parked domains.” (Domain parking is a practice whereby a search result resolves to a page containing advertising listings and links, rather than content.)

“Everyone recognizes click fraud is an ongoing problem,” Cuthbert said. He said that one of the problems is that Google, for example, continually pegs click fraud at less than 10% of paid search but does not provide the data to support that estimate.

“One thing they continually talk about is trying to compare their number to our number,” Cuthbert said. “But what they’ve never revealed is what the aggregate number of clicks they’re discarding is. If they’re going to criticize our numbers, they need to show us their numbers.”

Cuthbert said the solution is for search engines to embrace a third-party system the way the traditional media have, such as Nielsen for television or Audit Bureau of Circulations for print.

“Unfortunately, advertisers are the ones paying the price for having to wait,” Cuthbert said. “We’d like to see the engines embrace third parties.”

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