Click fraud incidents shoot up in Q3

More than 20% of clicks on pay-per-click (PPC) ads in the third quarter were unintended or malicious, resulting in wasted marketing money that drew website visitors with no interest on the product or service advertised and no intention to buy.

At 22.3%, the incidence of this problem, known as click fraud, increased more than 8 percentage points compared with 2009's third quarter, according to a study released Wednesday by Click Forensics, a provider of click-fraud detection services and products.

Click fraud affects the effectiveness of PPC ad campaigns, in which advertisers pay a fee every time their ads are clicked. PPC ads are typically short, text-based and linked to advertisers' websites. PPC ads usually run alongside search engine results and on regular Web pages related to their topic.

PPC ads are the most popular online ad format, accounting typically for between 45% and 50% of online spending by advertisers. Google is the world's leading seller and distributor of PPC ads, from which the company generates most of its revenue.

In the U.S. alone, marketers spent $5.7 billion in PPC ads in the first half of this year, according to a recent study from the Interactive Advertising Bureau and PricewaterhouseCoopers.

Click fraud occurs when PPC ads are clicked on either by mistake or maliciously. Errant clicks happen when users unintentionally click on an ad. The malicious clicks usually come from Web publishers seeking to drive up their PPC ad commissions.

Click Forensics blamed the third-quarter click-fraud rate increase on automated attacks launched using botnets and on emerging ad sources that fraudsters are exploiting, like mobile, social networks and video.

Google and other major providers of PPC ad services like Microsoft and Yahoo have technology and programs in place designed to monitor and combat click fraud.

Click Forensics has conducted quarterly click-fraud reports since 2006. It collects data from PPC campaigns in search engines, comparison shopping engines and social networks, and monitors traffic from more than 300 ad networks.

Copyright © 2010 IDG Communications, Inc.

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