PPC Click Fraud Rate Q2 2008

There is good news and bad news for PPC advertisers on the issue of click fraud for the second quarter of 2008.  Click Forensics has released their click fraud numbers for last quarter and so I will give you the good news first:

• Click fraud rates went down last quarter (16.0 percent) compared to the previous quarter (16.2 percent).

Other than that, that is about all the good news for PPC advertisers and click fraud.  Here is the bad news:

• Most click fraud happens on Search Engine content networks (Google Adsense and Yahoo! Publisher Network, for example).  On those networks, the fraud rate was 27.1 percent last quarter.
• 27.6 percent of click fraud traffic came from botnets, which is up more than 2 percent from last quarter (25.2 percent).  Another reason for users to protect their computers from hackers.
• Russia (4.9 percent), France (4.8 percent) and the U.K. (3.5 percent) are the coutries most responsible for click fraud traffic outside the U.S.

The sad thing about this is that, according to Tom Cuthbert, president of Click Forensics, a primary reason for the slight decline in click fraud from last quarter is because of the efforts of the ADVERTISERS, not necessarily the Ad networks.  According to Click Forensics, the advertisers have spent more time checking their clicks and filtering out the fraudulent ones before their campaigns were affected.  The Ad Networks have made better strides in doing that automatically, but it is still not enough.  In the end, it is still up to the people who pay to double-check their accounts, which is unfortunate that it has to be left up to them.

With the PPC click fraud rate being 16 percent industry wide, that loosely translates into $16.00 out of every $100 you spend is lining the pockets of some person who is not the least bit interested in your product or service.  If your monthly budget is $100, you are paying a lot per year for fraudulent clicks.  Pretty steep to me.

If you only advertise on Google and Yahoo, that number could climb to $27 out of $100, loosly figured.

This indicates that one should not just jump into Internet Advertising without examining all the angles.  It can certainly provide great benefits, but also presents risks that one should measure first.

It should also be noted about Click Forensics that their data are gathered from their own network called the Click Fraud Network.  That network is made up of more than 4,500 online advertisers and agencies, but it does not include everyone.  So, if you are weighing the pros and cons of PPC advertising, you should review data from multiple sources including the actual Ad Network you are considering joining.