Monday, October 22, 2007

Click Fraud Up Modestly in Q3, Including Google

tomcuthbert.jpg Click auditing firm Click Forensics released its Q3 report on industry-wide click fraud.  The news continues to be bleak for third-party content networks, including those operated by Google and Yahoo.  (Note that some of Google's Q3 upside came from its content network, along with our minor concern about this).  Among the findings:

-Industry average click fraud rate was 16.2% for Q3, up from 13.8% from 2006 and from 15.8% for Q2.

-Average click fraud rate of PPC advertisements on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.1%.  That's up from 25.6 percent for Q2, 21.9% for Q1, 19.2% for Q4.

-Over 60 percent of traffic from parked domains and made-for-ad sites was click fraud.  Click Forensics estimates that more than 70% of the sites in the Google and Yahoo networks fall into one of these two categories.  However, we estimate that these sites account for only about 25% of the paid clicks in both networks.

-In Q3, the greatest percentage of click fraud originating from countries outside North America came from France (4.2 percent) China (4.1 percent) and Germany (3.7 percent).

Click Forensics CEO Tom Cuthbert has been having a public pissing match with Google click-fraud czar Shuman Ghosemajumder.  Ghosemajumder says CF and other third-party auditors have no idea what they're talking about.  Cuthbert says Ghosemajumder knows exactly what they're talking about--and won't come clean about it.  After listening to both sides (and others), here's our take:

  • It's getting worse.
  • It is more prevalent and more of a concern on third-party ad networks (distributed search/Adsense for content) than on Google's and Yahoo's own sponsored search.
  • It's especially bad news for content providers who make a living using AdSense, et al.
  • It is something advertisers should pay attention to and spend money analyzing
  • If nothing else, the use of a good third-party auditing firm provides comfort that money isn't being thrown away.
  • Google et al could/should consider providing more detail about, at the very least, the number of total clicks vs. the number of clicks the advertiser was charged for.  It should also give advertisers more ability to select which sites they advertise on.

Industry Click Fraud Rate Hits 16.2 Percent in Third Quarter 2007
Click Fraud Rate for Content Networks Reaches 28.1 Percent

AUSTIN, Texas - Oct. 18, 2007 - Click Forensics[TM], Inc. today released industry pay-per-click (PPC) fraud figures for the third quarter 2007 from the search advertising industry's leading independent click fraud reporting service - the Click Fraud Index[TM] (

Now in its second year, the Click Fraud Index monitors and reports on data gathered from the Click Fraud Network[TM], which more than 4,000 online advertisers and agencies have joined. The Click Fraud Network provides statistically significant industry PPC data collected from online advertising campaigns for both large and small companies across all the leading search engines. Key findings from data reported for Q3 2007 includ

-The overall industry average click fraud rate was 16.2 percent for Q3 2007. This is an increase from 13.8 percent for the same quarter in 2006 and from 15.8 percent for Q2 2007.

-The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.1 percent in Q3 2007. That's up from 25.6 percent for Q2 2007, 21.9 percent for Q1 2007 and 19.2 percent for Q4 of 2006.

-Over 60 percent of traffic from parked domains and made for ad sites was click fraud

-In Q3 2007, the greatest percentage of click fraud originating from countries outside North America came from France (4.2 percent) China (4.1 percent) and Germany (3.7 percent).


Publishers and advertisers have recently felt the impact click fraud is having in the content networks. Increasingly, publishers are seeing a performance drop in the content network traffic quality. Advertisers are seeing their conversion rates drop significantly on content networks because of bad traffic coming from parked domains and other low quality sources.

"Click fraud activity continues to grow especially on made for ad sites, parked domains and on the content networks," said Tom Cuthbert, president and CEO of Click Forensics. "Advertisers, publishers and search engines need to take notice because content networks are becoming the fastest growing source of click fraud. Ensuring their quality is essential for the pay per click advertising market to continue its growth."

The Click Fraud Index publishes data collected from the Click Fraud Network (, the industry's first independent third-party click fraud detection service dedicated to helping companies more accurately monitor their online advertising campaigns for pay-per-click fraud. Click fraud data is tracked and published on a quarterly basis for specific search providers, industries and trends. The service is unique in that it monitors online campaigns for click fraud by correlating data collected from search provider campaigns and the advertisers' own web sites - providing the industry's most accurate view of click fraud to date.


About Click Forensics, Inc.

Click Forensics[TM] is the leading provider of click fraud management solutions that help online advertisers, agencies and search providers identify and eliminate pay-per-click fraud. The company also runs the Click Fraud Network[TM], the industry's top independent click fraud monitoring and reporting service with over 4,000 members. Click Forensics is headquartered in Austin , TX and is privately held with funding from Austin Ventures and Shasta Ventures. More information on Click Forensics and its offerings is available at