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Click fraud to net $750m this year

The phenomenon of “click fraud” – where visitors to websites click on a paid-for advertising or affiliate link without any intention of purchasing – could cost advertisers, agencies and search providers $750m this year, experts say.

The phenomenon of “click fraud” – where visitors to websites click on a paid-for advertising or affiliate link without any intention of purchasing – could cost advertisers, agencies and search providers $750m (£421m) this year, experts say.

The warning comes after search giant Google last month proposed a $90m settlement to meet claims that its advertising customers had been the victims of substantial click fraud.

The settlement proposal was made in response to a class action lawsuit filed last year against Google, AOL, Yahoo and Netscape, when retailers claimed they had been duped into paying for clicked links to their websites, even though those clicks were fraudulent.

Click Forensics, a spin-off from web analytics firm Optimal iQ, warned that  click fraud was still “a real threat” to both the advertising community and the search providers.

In an entry on his blog, Click Forensics president Tom Cuthbert reported on findings from companies affiliated to the Click Fraud Network of advertisers. “The overall ‘high threat level’ click rate is leveling off," he said. "As the number of advertisers increases in the network, we are seeing this number settle down to around 14% of all clicks from all categories.”

But he added that this “still means that click fraud could account for over $750m in 2006”.

“The search providers simply do not have the data available to resolve this issue," said Cuthbert. "There is a growing call for an independent third party to validate clicks in the same way that Nielsen, Arbitron and the ABC exist in traditional media.”

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