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 Yahoo, Click Forensics To Battle Click Fraud Together
Click fraud has historically pitted advertisers, who claim they are charged for fraudulent clicks on paid search ads, teaming up on the common objective of combating online click fraud, Yahoo! and Click Forensics announced Monday a joint effort to help advertisers avoid lost money with online marketing efforts.
Yahoo is the first search engine to work with a third party click auditing company. The partnership will permit advertisers to partake highly sensitive account information, such as click data with Yahoo through Click Forensics to eliminate click fraud and low quality traffic.
“In the first partnership of its kind between a search engine and an online auditor, Click Forensics will provide additional advertiser feedback to Yahoo! to help improve traffic quality for advertisers,” said Reggie Davis, vice president of marketplace quality at Yahoo, speaking on a panel Monday at the Search Engine Strategies conference in New York, where the partnership was announced.
The growing number of click fraud has led to more demand for companies that are able to track this practice, CNet said in a Monday blog post. The post cited stats from Click Forensics indicating that the rate of click fraud grew by 15 percent during 2007.
Companies like Click Forensics, which tracks and rates people, or automated software bots, are “clicking” on ads. The most recent report by the company states that the common click fraud rate of pay-per-click ads on search engine content networks, like Google AdSense and the Yahoo Publisher Network, was 28.3 percent in the fourth quarter of last year.
This is important because both Yahoo and Google hold a precarious position - wanting to please their advertisers by offering quality traffic - and their shareholders - by selling more ads. Both have disputed that click fraud data is a lot less than Click Forensics has claimed. Now they are adopting a bold step in letting Click Forensics play the intermediary.
But, Google is not too happy with those figures, challenging that Click Forensics’ methodology is faulty and the actual percentage of the click fraud is in the single digits, while Yahoo claims its rate is a subset of the 12 percent to 15 percent of the clicks on its network that it does not bill customers for.
Asked for comment, a Google spokesman gave this statement: “We provide numerous tools and support for third parties so that they can learn from our data and experience, and we work with them every day to improve advertiser ROI, including investigating potential cases of click fraud. We have been sharing information and working with third parties ever since we launched AdWords, and we are constantly improving additional tools for third-party support.”
The Yahoo-Click Forensics relationship seems like a step in that direction. And it gives Yahoo a way to distinguish itself from Google, a company that is ultra-secretive about most things, not just click fraud numbers.
Davis says that at the time he knew “we needed to be much more forthcoming with our percentages.”
He said the move would balance other steps Yahoo is taking internally and externally to combat click fraud, which forces Google to toss out 10% to 15% of the clicks on Yahoo search ads.
Tom Cuthbert, president and CEO of Click Forensics, who also sat on the panel, said the joint effort with Yahoo signaled a unified front against click fraud. “This means we are going to work together on your behalf to identify and find these bad clicks,” Cuthbert told the audience. “I applaud Yahoo in taking a really bold step in working with a third party.”
He went on to warn conference attendees that the problem of click fraud “is getting worse, not better.” He cited a USA Today article Monday focusing on one of the latest and most insidious forms of fraud-botnets. These networks of thousands of computers hijacked by profit-seeking Web crooks now affect 40% of the computers connected to the Internet, according to research data from Support Intelligence cited in the article. “Botnet scams are exploding,” Cuthbert said.
According to an article in Forbes, Click Forensics recently put the overall click-fraud rate for the online advertising industry at 16.6% in the last quarter of 2007, up from 14.2% for the same period a year earlier. For contextual advertising the rates were even higher - with an estimated 28.3% of clicks being fraudulent, up from 19.2% for last quarter of 2006. Both Yahoo and Google argue that the number is lower.
There is click fraud when people accidentally or click on ads to cost the advertiser money, but there are more malicious types of click fraud. Those are machine-made clicks - when millions of PCs get downloaded with software that creates clicks.
Click Forensics publishes the Click Fraud Index based on click data from some 4,000 companies. They also allow advertisers to block clicks from sites that send low quality traffic.
Industry analysts identify Click Forensics as being a sort of clearinghouse for the click behavioral data that advertisers collect. But, Yahoo! will not share information on how its 2,700 filters operate to detect fraud with advertisers. The company believes that doing so will provide an opportunity to the fraudsters to invent ways to overcome the filters.
Click Forensics has been making steady progress and recently announced they raised $10 millionSeries B funding round. The venture capital firm Sierra Ventures was the lead investor and existing investors Austin Ventures and Shasta Ventures also participated. in a
The partnership with Yahoo paves a way for the company to distinguish itself from Google, a company that is ultra-secretive about most things, including click fraud numbers.
Regardless of what the actual click fraud rate is, the problem is large enough to have prompted class action lawsuits, which Yahoo and Google have settled.
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