Ad non Sense. Net

According to Click Forensics, click fraud rates for content networks grew to 28.3% in Q4 2007. In other words, 28 cents from every dollar went to fraud. What this report is saying is 28.3% of [PPC] providers and publishers revenue/profits are attributed to fraud.
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Google has been has been intently focused on click fraud for years, but has done a piss-poor job of communicating this. Its communications strategy has effectively been to say, "Click fraud’s not a problem, third-party auditors like ClickForensics don’t know what they’re talking about, and if you don’t just take our word for it we’re not going to bother to explain ourselves." Finally, however, the company appears to have gotten as wise about this communications challenge as it has about others.
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Given that most of Google’s $13 billion in revenue comes from clicks on ads, you would think the words "click fraud" would inspire fear in Shuman Ghosemajumder, the company’s senior product manager and resident click-fraud czar. But the problem–publishers who inflate pay-per-click ad fees with automatic clicking software–doesn’t fluster Ghosemajumder or other Googlers.
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Beginning next month, Google plans to give advertisers the ability to prevent their pay-per-click ads from being shown to competitors suspected of repeatedly clicking on the ads to drive up their cost.
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Last year, the average click fraud rate of pay-per-click advertisements appearing on search engine content networks rose to 19.2 percent for the last quarter of 2006, the highest yet, according to Tom Cuthbert, CEO of Click Forensics. As detailed in Part 1 of this series, Internet advertisers and security pros are seeing increases in click fraud activities that siphon both sales and advertising dollars from vendors. Click fraud occurs when online advertisers pay search engine companies and advertisement Web publishers a fee for each click made by either real or phony would-be customers.
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Click fraud is a growing problem for online advertisers who rely on paid search services. Marketing experts are urging e-commerce vendors have to take proactive steps to combat it. Online advertisers pay the search engine company hosting their ad a set amount of money each time a computer user clicks on the ad. Click fraud occurs when an individual or group of people, either manually or through a computer program, repeatedly clicks on an ad to inflate the payment owed the publishers.
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Advertisers aren’t the only ones trying to solve the problem of click fraud; the federal government is also interested. Last week, the National Science Foundation issued a $149,923 grant to a graduate student working on the problem as part of the government’s Small Business Technology Transfer (abbreviated as "STTR" for some reason) program.
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Google product manager Shuman Ghosemajumder says a recent blog post misinterprets the rate of click fraud Google sees. On Monday, blogger Andy Beal, having spoken with Ghosemajumder at a recent conference, concluded that Google’s click fraud rate was less than 2%. In a reply on his own blog, Ghosemajumder attempted to clarify what he said.
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Defying the third-party firms that sell themselves to customers amid claims of greater incidents of click fraud, as much as 20 or 30 percent, a Google executive claimed the actual rate is only about 2 percent.
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A journalist’s investigation into click fraud has unearthed a proliferation of automated click fraud by "botnets," and the alleged involvement of organized crime and terrorist groups.

Jim Hedger, a search marketing journalist and founder of Markland Media, made his findings known on his Internet radio show The Alternatives, broadcast on Webmaster Radio from the floor of Search Engine Strategies in Chicago on Wednesday afternoon.
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It began on Mar. 10, 2004, when a computer programmer from Oak Park, Calif., named Michael Anthony Bradley arrived at Google’s offices for a prearranged meeting with the company’s engineers, according to a criminal indictment filed two years ago in the U.S. District Court in San Jose. Bradley, then 32, proceeded to demonstrate new software, dubbed "Google Clique," designed to generate false clicks on Google ads. Bradley claimed his program could force Google to pay millions of dollars on false clicks and threatened to release it to others unless Google paid him approximately $150,000, according to the indictment.
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Google’s $6 billion-a-year advertising business is at risk because it can’t be sure that anyone is looking at its ads. The problem is called click fraud, and it comes in two basic flavors.

With network click fraud, you host Google AdSense advertisements on your own website. Google pays you every time someone clicks on its ad on your site. It’s fraud if you sit at the computer and repeatedly click on the ad or — better yet — write a computer program that repeatedly clicks on the ad. That kind of fraud is easy for Google to spot, so the clever network click fraudsters simulate different IP addresses, or install Trojan horses on other people’s computers to generate the fake clicks.
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Internet advertisers paid $800 million for bogus clicks on their marketing messages last year, shaking confidence in the industry and prompting many to reduce spending with Google, Yahoo and other Web sites, according to a study to be released today. The survey, by Outsell Inc., a market researcher in Burlingame, is one of the most detailed looks at the nagging, high-profile problem known as click fraud. Advertisers have long complained that major Internet sites don’t do enough to combat the practice or, at least, disclose the extent of it.
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