Click-Fraud: Worse than TiVo?

The Post has another article about click fraud and how some internet advertisers are attempting to band together to fight back:

In the past year, industry analysts say, new forms of click fraud have emerged from the shadows of masked operations into plain view on the Internet. Dozens of Web sites offer to pay people to sit and click on ads, or to type certain words into search engines for hours at a time. Some sites have forums where people swap click-fraud tips.

Advertisers, who often pay for online ads only when someone clicks on them, have been crying foul and complaining to federal regulators. They’ve also sued the Internet’s largest ad networks, Google Inc. and Yahoo Inc., which earlier this year settled class-action lawsuits by advertisers.

A new lawsuit was filed last month in Pennsylvania seeking class-action status against Google. The FBI, the Securities and Exchange Commission and the U.S. Postal Inspection Service are investigating click fraud.

On-line advertising is gaining phenomenally because the results supposedly have been better than those for the 30-second spot. I wonder how the problem of click fraud compares with the problem of people skipping the commercials when they use TiVo or another DVR.

TiVo

It’s a different kind of issue, but the same effect: paying for an audience that isn’t seeing the ad. Click fraud is malevolent and deceptive, more like a RICO activity. TiVoing is just an individual’s decision to fast-forward through the commercial.

With click fraud, the advertisers lose because they may be paying a dime for each click (although the price varies depending on the demand for the search term). The person doing the clicking loses too, because at half a penny a click, if they can click on 10 ads a minute (waiting for the sites to refresh so they can click again), that’s a nickel a minute or $3 an hour. Google and Yahoo (and the web sites that receive the fraudulent traffic, and whose owners must be behind the click-fraud rings) are the winners.

Still, I wonder which is the bigger economic problem for advertisers: skipping broadcast ads or fake clicks on web ads?

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Author: Lee Aase

Husband of one, father of six, grandfather of 14. Chancellor Emeritus, SMUG. By day I'm the Director of the Mayo Clinic Social Media Network. Whatever I say here is my personal opinion, and doesn't reflect the positions of my employer.

0 thoughts on “Click-Fraud: Worse than TiVo?”

  1. At least with PPC ads, advertisers have the choice to opt out of contextual advertising. That’s where the bulk of the click fraud occurs. The Post article neglected to mention this crucial fact. Pure search engine ads that run on google.com and on search.yahoo.com directly experience very little click fraud. That’s the kind of advertising that has a massively higher ROI than TV ads.

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