Posted on 07/16/2006 5:30:12 PM PDT by Brilliant
SUN VALLEY, Idaho (AP) -- Swindlers have stepped up their effort to fleece millions of dollars from online advertisers who use lucrative marketing networks run by Google Inc. and Yahoo Inc., according to a quarterly report to be released Monday.
The sales referrals generated by clicks on the brief advertising links popularized by the two Internet powerhouses are a sham 14.1 percent of the time, based on information collected from 1,300 online marketers.
That's up from a click fraud rate of 13.7 percent three months ago, according to Click Forensics, a San Antonio-based consulting service that compiles the index.
The statistics jibe with other data asserting advertisers are paying a significant sum to Google, Yahoo and their partner Web sites for phantom shoppers even as more resources are devoted to thwarting scammers.
A recently released survey of 407 online advertisers by market research firm Outsell Inc. estimated click fraud cost advertisers $800 million last year.
Click fraud is a highly sensitive subject for Mountain View, Calif.-based Google and Sunnyvale, Calif.-based Yahoo because it raises doubts about the trustworthiness of the advertising model that drives their profits and stock prices.
Google, Yahoo and partner Web sites get paid each time someone clicks on advertising links usually displayed at the top and on the side of Web pages. Advertisers pay the commission even when the click doesn't produce a sale -- a system that inspired bilking schemes.
The motives for click fraud vary. Most often, Web site owners repeatedly click the ads on their own sites to generate money for themselves. In other cases, advertisers target the ads of their rivals to drain their marketing budgets.
As click fraud becomes more prevalent and attracts more media attention, advertisers are becoming more aggressive about demanding refunds and better protection, said Tom Cuthbert, Click Forensics' president.
"Advertisers aren't satisfied with the status quo," he said. "They don't want to keep losing sleep at night wondering how much money they are losing to click fraud."
Reflecting those concerns, about 900 advertisers have joined Click Forensics' anti-fraud network during the past three months.
Google and Yahoo are better at weeding out click fraud than smaller Web sites, but Click Forensics still concluded both companies are being hard hit. About 12.8 percent of the clicks on ads served up by Google and Yahoo are deceptive, up from 12.1 percent three months ago.
Cuthbert said Google and Yahoo may be identifying some of those fraudulent clicks and removing fees from advertisers' bills. Both companies are tightlipped about how they monitor for click fraud, another factor that has frustrated some advertisers that want more transparency.
Google Chief Executive Eric Schmidt acknowledged click fraud remains an ongoing headache, but disputed the notion that the problem is becoming more prevalent.
"Smart people are trying to break the law, but we have even smarter people trying to prevent it," Schmidt said during an interview at a conference that concluded Sunday in Idaho.
Yahoo CEO Terry Semel declined to discuss the latest data on click fraud, saying he intended to address the issue Tuesday when the company is scheduled to release its second-quarter earnings. "We will be very proactive about it," Semel said during the same Idaho conference.
Both Google and Yahoo have agreed to settle class-action lawsuits to limit their potential liability for past click fraud. If approved, the two settlements would address any click fraud that occurred amid more than $22 billion of ad spending.
A two-day court hearing on Google's offer to pay up to $90 million in refunds and attorney fees is scheduled to begin July 24 in an Arkansas court. Yahoo's proposed settlement, which doesn't limit how much the company might pay, isn't scheduled to be reviewed in a Los Angeles federal court until late this year.
wow i think id expect more like 15% real clicks
Internet business like most store front business is
plagued with dishonesty and con games. Most producers
of products fail to stand behind their products.
How do you commit 'click fraud'?
I got to get my eyes checked. I thought that read bogus chicks. I was expecting a story on Russian mail-order brides.
lol there are plenty of Bogus American chicks too.
I'm guessing by having some loser spend his time clicking the ad so that you get paid more.
I responded to an announcement that I had won a free meal for two at a restaurant to be selected from a list provided. All I had to do was try a product from another list provided.
I chose Video Professor. Sure enough the video arrived, after my credit card was charged with the shipping and handling. Fair enough. However the next week my account was charged $79.95 by Video Professor. I immediately returned the video, which I had not opened and eventually received a credit of $79.95.
A few weeks later another video arrived from Video Professor and I was again charged shipping and handling. This time my bank wanted to cancel by debit card and issue a new one (what a hassle). I told them to forget it.
Net result - I paid approx. $10. and never did get the free dinners.
Morals - 1. there are no free lunches - or free dinners either.
2. Never respond to an offer on line from an unknown source.
There are other, more nefarious forms of click fraud, such as someone from a rival site intentionally clicking on the advertising at your site to try to cause you problems with your advertising networks. Or, if you are an advertiser, a rival could intentionally click on your ads to drive up the cost of your advertising bill.
Smoke and mirrors and an unethical industry.
Reminds me of newspaper circulation figures and Hollywood's creative accounting.
But legislators have never done much to prevent the sale of your private information between these commercial interests. So now we are faced with rampent spam, identity theft, and fraud. The barn door is still open.
Perhaps a javascript to automatically credit the click.
The are popups as well as popunders.
And then there are the popups that launch popups. Some such sites buy expired domain names (or buy soundalikes), direct you to a "search engine" they load onto that page and then do all sorts of nasty things to your computer (that was how I got gator's spyware without ever clicking anything).
Excellent description for the layperson out there.
Try my product. Always wondered what his hook was. Now I know.
Really, it's so easy to get a massive inocculation of malware from one simple mistake that I wonder how people who don't know much about computers are able to stay up and going at all.
It seems that Google and Yahoo! are on the defensive in a standard cycle of offensive/defensive buildup. There is a system with a potential to be abused and exploited. The abusers and exploiters devise an ingenious way to carry out fraud. Those who run the system need to raise their defenses to counter the current fraud-- but the fraudsters eventually manage to outmaneuver the defenses and create a new scheme. This is somewhat analogous to the historical defense/offense escalation in the military realm. The moment someone builds a new fortress or defense system impregnable to old attacks, somebody else will try to find a way to breach the new defense system.
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Is this the same thing as ad pimping?
I've seen non-profit churches claim their message/outreach is going out to the world based on the number of hits on their sites. And since they are non-profit (their supposed community outreach services have no profit/loss/etc) the number of hits supposedly show "effectiveness" which drives their donation base.
I would think that in most cases this would generate only one click per user. At least this is how Yahoo does it. Unless the fraudsters are killing their cookies and then clicking again, I don't see how a single user could rack up multiple clicks.
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