Even the bitterest of enemies can find common ground when reputation is on the line. That helps explain why Web-search rivals Google (GOOG), Yahoo! (YHOO), and Microsoft (MSFT) together are supporting an effort to get a better handle on click fraud, a practice that inflates the cost of advertising on the Web.
Those three are among companies and groups that together will try to come up with a way to determine what makes a click legit. The Interactive Advertising Bureau announced the formation of the Click Measurement Working Group, in collaboration with all three of the search engines and the non-profit Media Rating Council, to produce a standard definition of a "click."
There's a lot at stake. Click fraud—using software or low-cost workers to repeatedly click on banner ads in order to artificially inflate the success of an ad campaign—cost advertisers just shy of $1 billion last year, according to an estimate by researchers at Outsell (see BusinessWeek.com, 7/07/06, "Counting up Click Fraud's Toll"). And Google and Yahoo! have been hit with multimillion dollar lawsuits from clients who say the companies don't do enough to combat click fraud.
Some advertisers complain that the search engines stand to benefit from a lax stance on fraudulent clicks, which, after all, can mean more money for an ad publisher that's paid based on the number of times an ad receives a click. Google recently heeded its constituents' call for increased transparency at least partially (see BusinessWeek.com, 7/27/06, "Click Fraud: Google Comes Clean, Sort Of"), but the problem is far from solved.
The group formed by the Interactive Advertising Bureau will create "click measurement guidelines" to provide a benchmark for determining invalid clicks. BusinessWeek.com spoke with Greg Stuart, chief executive of the Interactive Advertising Bureau, to find out more about the group's plans:
How grave a concern is click fraud for advertisers?
There's a host of stuff out there that concerns marketers that needs to be cleaned up. It includes impression measurement, it includes click measurement, standardized contracts, so you know for us it's all a big picture of stuff that in order for the maturing of the medium needs to be done. And how big a deal is click fraud? We don't like anything that would give marketers concern, especially if it's a solvable problem.
Advertisers say the search engines haven't done enough to combat fraud.
Search produces results. End of story. It produces results. My guess is that these advertisers would like to see any concern that might seep into the view that their management has, or anybody else. Because they know in their heart of hearts that this really works. It's in everybody's interest to clean this one up.
What exactly have the search companies pledged to do?
We're going to go forward with developing click-measurement guidelines that will address at a public level all the sort of subsidiary issues of that, which includes fighting globally invalid clicks and also click fraud.
Did Yahoo!, Microsoft, Google, and others involved promise to give you unlimited access to their click data?
They have committed the time, the energy, the resources to see this through to a final industry guideline—one that's accepted by not just themselves, but by agencies and by marketers and by the advertising industry overall. Does that mean that they would bring to bear some data and other insights? Absolutely. Could they still have proprietary solutions of their own? Yeah, stuff that might be protected by their own (intellectual property), but they have committed the resources to help.
Media need to operate with transparency. There's marketers and agencies who are paying money for things. They need to know, what are they paying for? What does that look like? What is the standardized way in which that's being counted? And also ultimately, is that audited? Can we validate that (using a third party)? And so, in an industry that is now going to be close to $16 billion this year, it should be relatively obvious that we need to operate with the principles that all media operate under.
What's the timeframe for creating the click-measurement guidelines?
I've learned through experience with standards I never make a commitment to timelines. It took us 14 months to do the ad-impression guidelines, which is kind of the last big one that we did. We don't really know what we don't know at this point. We could come to a conclusion and say "Geez, we're pretty close. There aren't any outside data—let's get it done." Or we could say, "Hmm, I don't think we're comfortable with that issue, let's dig deeper."
What bodies will be involved in auditing, using your definition?
That will be really up to the industry to define that, so in the process of developing measurement guidelines we'll also be developing audit guidelines. That's how we did it in the impression guidelines, so I fully expect to do the same thing.
After you define what a click is and people find out certain publishers generate a large number of invalid clicks, could there be some sort of industry-wide "blacklist" of publishers that comes out based on your definition?
I guess what I'd say is, market dynamics prevail. I do believe that it is the responsibility of the media company as we're doing here to set guidelines and be audited against those guidelines, to be able to provide a proof of performance to advertisers. Which is why we're doing this with the Media Rating Council, which is such a big deal organization for this kind of stuff.