Click Fraud Reportedly Up

FEBRUARY 1, 2007

Click, click, click, click, click, click, click, click, click, click, click, click....

Major search engine sites do not want to hear about it, but new data from Click Forensics indicate that click fraud threat levels to online advertising campaigns running on search engine content networks are not only continuing, but also rising.

Fourth-quarter numbers from the Click Fraud Index show that the overall industry average click fraud rate was 14.2%, compared with 13.8% for the third quarter, 14.1% for the second and 13.7% for the first.

That averages nearly 14% for the year.

"The most interesting data points from last quarter's data was that the industry average click fraud rate climbed to its highest level in 2006, said Tom Cuthbert, CEO of Click Forensics.

He added, "The click fraud rate for affiliate sites was significantly higher than the overall industry average."

The average click fraud rate of pay-per-click (PPC) ads on search engine networks was 19.2% for the fourth quarter of 2007. At the same time, the average PPC term cost for the top key terms across the five largest search advertising industry categories was $3.50, an average that fell steadily from a first-quarter high of $4.75.

The industry average click fraud rate for high-priced search terms — defined as terms that cost over $2.00 — remained slightly higher than 20% through the latter part of the year. That is important to note because high-priced terms often make up the majority of an advertiser's total spend.

For more on this subject, read eMarketer's Search Engine Marketing: Players and Problems report.