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BizReport : Advertising archives : September 25, 2006

Click Fraud Runs Up To USD1 Billion

A recent article published by Business Week shows that click fraud leads to damage of roughly USD1 billion per year. Online advertiser confidence in this marketing option is waning.

by Angelique van Engelen

One of the ways click fraud occurs is when spoof websites are created to recycle Google or Yahoo pay per click advertisements. Their sole purpose is to generate as many clicks as possible, cashing in on unsuspecting advertisers. Combating this cyber crime up till now has mostly been the task of Google, Yahoo and the smaller engines who run text advertisements, who themselves benefit from click fraud. When site owners complain to them, they tend to reimburse the charges. The FBI has recently started to become active in combating the crime.

Yahoo believes that it has a handle on the problem. "We think click fraud is a serious but manageable issue," John Slade, Yahoo's senior director for global product management was quoted as saying in Business Week. His Google counterpart was saying his company strives to detect every invalid click that passes through its system. However the confidence that advertisers had in the once thought of as most ingenious advertising system, is visibly waning.

eMarketer Inc. is estimating that internet ad spend is the fastest growing advertising sub sector and the US market is set to have near doubled in size by 2010, to USD 29 billion. The market for pay per click is estimated at half this size.

Tags: eMarketer, fraud, Google, PPC, Yahoo

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