$137.8B U.S. ad spend for top 200 advertisers
Whether you know it or not, your brand is shelling out money for clicks that did not come from humans. Precious marketing dollars are being burned because a competitor decided to raise your effective cost per action using sophisticated bots.
Click fraud is now easier to get away with than cross checking in hockey, late hits in football or biting off an ear in boxing. However, it's equally dirty. It is not a punishable crime -- yet -- and it is extremely difficult to trace.
Today, we cannot pin individual brands on click fraud or prosecute it yet. So, let's take the fairest approach to the problem: Let's assume that we are all responsible for click fraud, and let's talk about how to eliminate it.
It's Not Illegal, Yet
In 2006, Google agreed to a $90 million settlement in a click-fraud class-action lawsuit filed by Lane's Gifts and Collectibles. That same year, Yahoo settled a click-fraud lawsuit brought on by Checkmate Strategic Group.
Of course, the claimants did not go after the real perpetrators of click fraud because it's extremely difficult to identify them.
So How Do We Get Rid of Click Fraud?
We cannot hope to eliminate click fraud until perpetrators face consequences and victims have technology to minimize the damages. I recommend an approach that makes the costs for perpetrators higher and the costs for victims lower so that competitors lose the incentive to use click fraud. The solution could look like this:
1. Make Click Fraud a Crime
Click fraud needs to be made a federal offense immediately. Click-fraud perpetrators essentially pile up and burn their competitors' marketing budgets in the one place they can attack them, and they don't get in trouble. I'd like to see perpetrators pay a hefty fine and compensate victims for the damages. A lot of companies will immediately cease click fraud because they won't risk associating their brand with criminal activity.
2. Ask the Government to Track Perpetrators
Tracking click fraud is hard, but it's not impossible. If you can track a bot to an IP address, you can often track that to a person or organization. I believe a federal government entity could take charge of monitoring click fraud and tracking down perpetrators. If click fraud were made a crime, this type of assistance would be conceivable.
3. To Prove Fraud, Use the IAB Bot List
Click fraud would disappear if it no longer exacted a cost on competitors. Therefore, we need standards for detecting click fraud, and I believe the Interactive Advertising Bureau (IAB) bot list needs to be part of that standard. The IAB maintains a list of spiders and bots that provides a baseline for detecting fraud across the industry. If companies could detect click fraud by comparing traffic activity against this bot list, this could be sufficient proof for requesting reimbursement from the publisher.
4. Define Fraud in Numbers
The risk of making click fraud illegal or asking publishers to compensate advertisers is that companies may abuse the system. Advertisers could claim click fraud without good cause, or publishers might deny evidence of click fraud. Thus, we need a standard for what entails click fraud in cases where the IAB list or other measures, such as viewability metrics, fall short. For example, we could define click fraud as more than five clicks from a unique user within a single 24-hour window. This could encourage publishers to offer a "unique user click model" that negates the incentives for committing click fraud.
The companies that engage in click fraud are doing the most harm to themselves because they're compelling their competitors to follow suit and join this shadow war that reflects poorly on our entire industry. By making click fraud illegal, enlisting the aid of government, using reliable click-fraud detection methods and experimenting with ad models that negate the incentives for fraud, I believe we can eliminate click fraud. When the risks outweigh the incentives, we'll all stop using this harmful weapon.