Click Fraud On The Rise, Says Click Forensics

Click Forensics, the company that maintains the Click Fraud Index, a network that monitors and reports on data gathered from more than 3,500 online advertisers and their agencies, has released its most recent quarterly report on click fraud.

The company found that the overall industry average click fraud rate was 14.8 percent for Q1 2007 versus 13.7 percent for the same quarter in 2006 and 14.2 percent for Q4 of 2006, 13.8 percent for Q3 of 2006, 14.1 percent for Q2 of 2006, respectively.

At first glance, these numbers may seem alarming, but they may not take into account the discounting of questionable clicks done by most search engines. In fact, Google has stated that click fraud amounts to just .02% of all clicks after it allows for other non-converting clicks. See Danny’s Google: Click Fraud Is 0.02% Of Clicks for a detailed look at how Google analyzes clicks and why its number of fraudulent clicks is so much lower than that reported by Click Forensics.

Other findings from the Click Forensics report:

• The average click fraud rate of pay-per-click advertisements appearing on search engine content networks was 21.9 percent, versus 19.2 percent for Q4 of 2006.
• The industry average click fraud rate for high-priced search terms was 22.2 percent compared to 20.9 percent in Q4 2006, 20.9 in Q3 2006 and 20.2 in Q2 2006. High-priced terms are defined as terms that cost over $2.00. These high-priced terms often make up the majority of an advertiser’s total spend.

“Click Forensics believes click fraud may be mirroring other kinds of online fraud, such as spam and phishing. As companies step up efforts to fight fraud, so do fraudsters especially when there’s lots of money to be made,” wrote Click Forensics’ Karl Scholz in an email.