? This Week's Podcast with VC Jonathan Seeling |
| I was wrong on Zidane ?
September 22, 2006
BW on click fraud: A hint of schadenfreude
BusinessWeek's cover story about click fraud has lots of good and fresh reporting on the subject. Not sure I go along with the conclusion, though. In the last paragraph, the story quotes a marketing professor who predicts that continued fraud is going to "scare away the further development of the Internet as an advertising medium."
I think that's a bit dire. Yes, click fraud is a serious problem. It will push more research will into fraud detection. This will lead to further development of Internet advertising technology, a more sophisticated understanding of network dynamics, and new services. Those companies that do a better job of providing clean results will be able to charge a premium. In the meantime, advertisers are happy to use click fraud for leverage to wrest refunds and other concessions from the search engines.
The other question (which the story didn't cover): Will the menace of click fraud on the Internet send more advertising scurrying back to papers and magazines? Hmmm. I'll keep quiet and listen to your thoughts.
BusinessWeek, spam and other abuses
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. Contact firstname.lastname@example.org if you are interested.
Posted by: Tim Finin at September 22, 2006 02:57 PM
The article made a very interesting read. I am no expert but my guess is that people will factor in a low level of fraud clicks as cost of doing business but that would be possible only with better detection techniques.
Posted by: Mridula at September 24, 2006 11:51 AM
I would estimate click fraud at 80%, not 10 to 15% as reported by the article. I have friends that are running websites, just for the advertising revenue, and have other friends who click on the sites and the ads. They just laugh and say they are making $5,000 to $10,000 USD a month from this! They also say legal type sites with class action lawsuit type of keywords pay $5 to $30 a click! Amazing that lawyers would pay that much. Is America a great country or what!
Posted by: Sam at September 28, 2006 02:00 PM
It is because of rampant clickfraud that our organization markets through SEO and other means rather than pay-per-click.
Posted by: etronicsland at October 4, 2006 05:13 AM
I think the article explained click fraud pretty well but did so only after painting all online advertising as fraudulent. The cover itself, if one were walking by a newsstand, gives the impression that online advertising is somehow deceitful and not trustworthy.
As the director of Internet operations for a small daily newspaper in Northeastern Pennsylvania, I was especially annoyed by the unsourced statement on page 49 and repeated in the sidebar on page 56 that "There is concern that some media companies commit impression fraud by overstating the number of visitors to their sites." Concern from whom? This so-called concern as never been brought to my attention or to the attention of any of my colleagues.
I'd like to know who is concerned.
I think it's irresponsible for Business Week to parade click fraud, a very real problem on SOME Web sites, as the poster child for all online advertising. Your cover design was intended to spark fear in the market and your unnamed sources only served to fuel that fire without any evidence.
Please name the source of the concerned so that we, in the responsible online media realm, can address those concerns.
Director, Internet Operations
Dow Jones Local Media Group
Posted by: Kathy Schwartz at October 4, 2006 01:47 PM
Eliminating click fraud will not change the cost of advertising on the search engines. If click fraud were eliminated, advertisers would be willing to spend more per click.
My company uses ROI to calculate our bids on each click. If we had higher quality traffic, we'd simply bid a higher amount per click. The overall ROI would probably not change. We assume our competitors would also be able to raise bid per click if click fraud were eliminated.
However, the problem with click fraud is that the WRONG people are getting paid for these clicks. It's ripping off quality content sites that should be getting paid more by the search engines for each quality click. Click fraud dilutes the cost of individual clicks.
The wrong people are complaining about click fraud. It's the adsense advertisers who are losing money, not the people paying for clicks.
Posted by: M Mathason at October 23, 2006 11:28 AM