Click fraud detection and prevention methods

¶ … Internet advertising [...] click fraud as argued in two business journal sources. Click fraud is the practice of fraudulently clicking on Internet ads where the advertiser is charged for ads that did not really result in sales or interest. Internet advertising is a huge business in today's marketplace, and people have found a way to exploit it.

Internet advertising is one of the fastest growing advertising markets, and the major players are Google and Yahoo. While thousands of advertisers are jumping on the online market, there is a growing area of fraud related to online advertising. The first article, "Click Fraud," states, "Fleischmann is a victim of click fraud: a dizzying collection of scams and deceptions that inflate advertising bills for thousands of companies of all sizes" (Grow & Elgin 2006, 14). This click fraud is costing advertisers millions of dollars every year, and the article notes that while Google and Yahoo acknowledge it, they have done little to prevent it, even if they do say they "filter" out the fraudulent clicks. The article continues, "Google and Yahoo are grabbing billions of dollars once collected by traditional print and broadcast outlets, based partly on the assumption that clicks are a reliable, quantifiable measure of consumer interest that the older media simply can't match" (Grow & Elgin, 2006, 15). The authors believe that 10 to 15% of online clicks are fraudulent, and that this can cost advertisers billions of dollars a year, although there are no firm figures. Because of growing concerns over click fraud, advertisers are growing increasingly wary of Internet advertising, and Google and Yahoo have both been the target of class action suits over the practice of click fraud.

Fleischmann, the advertiser quoted in the article, does detailed analysis of his clicks, and has identified many bogus clicks coming from foreign countries. He has statistics on how long the clickers stay on his site, and the bogus clickers stay only a matter of seconds. Google and Yahoo both claim the practice of PTR (paid-to-read) clicking is not widespread, but the article tends to dispute that. The authors interviewed people who host parked websites filled only with Google and Yahoo ads, and then recruit people to click on those ads for pay. It is a growing media scandal that is not being addressed adequately, and the article shows how easy it is to create these parked websites and begin bilking advertisers. While there have been some law enforcement investigations, many of the website operators do not feel they are doing anything wrong, and they do not view their activities as illegal. Along with PTR fraud, there are also clickbots, which automatically click on ads to generate revenue for the advertising mediums while charging advertisers for bogus clicks. The article makes it clear that other media outlets have inflated their circulation in the past, leading to higher advertising revenues, and that this Internet click fraud is scaring some advertisers away from using the Internet to market their wares. It makes it clear that advertisers must be vigilant when it comes to Internet advertising, and they need to know where the clicks are coming from that they are paying for.

The second article concerns another aspect of click fraud - the people who perpetrate it. One example is a man who attempted to blackmail online giant Google because he had developed a software program that could supposedly bilk them out of millions of dollars with fraudulent clicks on their GoogleAds Web sites. The author of this article notes, "Click fraud is perpetrated in both automated and human ways. The most common method is the use of online robots, or 'bots,' programmed to click on advertisers' links that are displayed on Web sites or listed in search queries" (Olsen 2004). The author notes that several of the largest Web sites, like Google and Yahoo, employ teams of "fraud squads" who actively look for illegal advertising activity such as click fraud, in an attempt to deal with the problem. However, since so many of the fraudulent activities are based in foreign countries, it is difficult if not impossible to catch all of them. Many advertisers now know that this activity exists, and as the previous article notes, many more are keeping a close watch on their statistics and challenging any clicks they suspect may be fraudulent.

Perhaps the most surprising information in this article is that many rival companies engage in click fraud against their competitors. The author cites two examples of advertisers who click on other companies ads to deplete their marketing budgets and make their advertising less effective. This kind of activity would be difficult to prove and correct, and it seems like a very underhanded way to do business.