Click Fraud Down By 0.3 Percent

October 19, 2006

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The industry average click fraud rate trickled slightly downward in the third quarter according to the Click Fraud Index from ClickForensics; rates for top tier providers like Google and Yahoo fell nearly one percent.

Click Fraud Down By 0.3 Percent Click Fraud Rate Slightly Decreases
Pay per click fraud figures released by the Click Fraud Index of more than 2,500 advertisers and their agencies showed the fraud rate for keywords priced $2.00 or more reached 20.9 percent. Meanwhile, the overall industry rate hit 13.8 percent, down slightly from 14.1 percent in the second quarter of 2006.

“The industry average click fraud rate continues to hover between 13 to 14 percent,” said Tom Cuthbert, president and CEO of Click Forensics, LLC. “As the Q4 holiday season approaches, companies are expecting to spend more on PPC advertising than any other time of the year.”

Cuthbert also called out affiliate sites for particular attention. He said advertisers needed to watch traffic from those sites, “which are showing indications of higher levels of potential click fraud.”

The report broke down the click fraud numbers for the third quarter as reported to the Click Fraud Network:

• The overall industry average click fraud rate was 13.8 percent versus the average of 14.1 percent for Q2 and 13.7 percent for Q1

• The industry average click fraud rate for high-priced search terms was 20.9 percent in Q3 versus 20.2 percent in Q2. High-priced terms are defined as terms that cost over $2.00. These high-priced terms often make up the majority of an advertiser’s total spend.

• The industry average click fraud rate for companies running online advertising campaigns through:

• Tier 1 search providers, such as Yahoo! and Google, was 11.9 percent in Q3 versus 12.8 percent in Q2 and 12.1 percent in Q1

• Tier 2 search providers was 23.2 percent in Q3 versus 20.3 percent in Q2 and 21.3 percent in Q1

• Tier 3 search providers was 25.6 percent in Q3 versus 27.1 percent in Q2 and 29.8 percent in Q1

• The average PPC term cost for the top key terms across the five biggest search advertising industries – Retail, Financial Services, Health & Fitness, Technology, and Entertainment – for Q3 was $3.92. This compares to $4.51 in Q2 and $4.75 in Q1.
Click fraud should be the issue gaining better attention in 2007, as advertisers demand greater accountability from paid search ad providers. A report from Outsell Inc predicted “2007 will be the year that (Google, Yahoo! and Microsoft), publishers, advertisers, and auditors establish standardized third-party audit and certification processes to validate clicks and overcome click fraud.”

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