The Search Engine Marketing Professional Organization reports that the percentage of advertisers who say that click fraud, the artificial inflation of click through numbers, is a growing problem tripled in 2005, to 16%. Elsewhere, a survey by IntelliSurvey Inc. and Radar Research reports that, among respondents surveyed, 46% of all advertisers with 500 or more employees have been a victim of click fraud.
These respondents also noted that cases of click fraud are related more to publishers or networks attempting to inflate their affiliate revenues than with competitive click fraud.
Click fraud is an issue that has been on the minds of many for several years, but it is only in recent months that the subject has heated up, due primarily to the growing awareness that advertisers' budgets are moving in larger numbers to the Internet. It has been suggested that the recent gyrations in Google's stock price are partly due to the fears over how click fraud could reduce the search engine's revenues. Scott Kessler, a Standard & Poor's analyst, said recently that Google needs to address this problem in a more forthright manner. "No one has any idea as to what Google assesses [as] its own percentage of clicks that are generated by fraud, no idea what that process consists of, and all the things that are being done to battle it," said Mr. Kessler, as reported in BusinessWeek.
Evidence of growing anxiety was heard at last week's Search Engine Expo 2006 in New York, as reported by Advertising Age. The magazine noted that "anecdotally, search vendors say fraud represents between 5% and 35% of clicks, depending on the industry, reportedly costing marketers up to $1 billion a year."
Jessie Stricchiola, founder of Alchemist Media, also pointed to what she sees as a degree of lackadaisical response from Yahoo! and Google. "We've seen a pretty consistent downward trend in response to advertiser complaints," Ms. Stricchiola said. She was particularly disturbed by a subtle notice change at Google's Website last year, a note for advertisers that originally read that "we detect most invalid clicks" but was changed to "our goal is to detect most invalid clicks."
Shuman Ghosemajumder, a business-project manager at Google, countered these remarks, as reported in BusinessWeek, by saying, "I hope everyone knows we take this very seriously." He contended, though, that there is a need for a set definition for fraudulent clicks. "People spend millions of dollars in TV advertising, but do they really know those people were sitting there watching that program?"
To read more about click fraud's impact on search marketing, look for eMarketer's forthcoming research report titled Search Marketing: The Players and the Problems due later this month. If you would like to be notified when this report is available, click here.