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Search giants unite to battle click fraud

Out-Law News | 03 Aug 2006 | 4:41 pm | 1 min. read

Some of the biggest names in internet search have agreed to try to tackle the growing problem of click fraud, the online advertising scam that costs advertisers millions of dollars a year.

In the aftermath of a $90 million proposed settlement by Google with a group of its own advertisers, Google has joined with Yahoo!, MSN Search and Ask.com to attempt to work out a way of measuring fraud levels.

Websites charge advertising fees based on the number of site users who click on adverts. Click fraud happens when individuals or software programs click on adverts to falsely increase the amount which advertisers pay.

The practice is allegedly most commonly carried out by site operators themselves to increase advertising income or by competitors attempting to use up a company's advertising budget.

The new research will be co-ordinated by the Interactive Advertising Bureau (IAB), which has set up a Click Measurement Working Group.

"The IAB is steadfast in its commitment to the principles of transparency and industry oversight for the measurement of any aspect of interactive media," said a statement from the IAB. "The Click Measurement Guidelines will also outline an industry driven auditing and certification recommendation for any organization involved in performance based marketing like search engines, ad networks, third party ad servers or any company that counts clicks as a part of the media currency."

Advertisers sued Google over alleged click fraud and the company last week agreed a $90 million settlement which was recommended by a court. Though most of the advertisers who were party to the class action law suit accepted the deal, it is believed that some parties have not accepted that settlement. It did not involve cash, but sums redeemable against future Google advertising spending.

Yahoo! recently also settled a case with advertisers, paying out $5m for fraudulent clicks paid for.

The IAB's Working Group will define what a click is and what constitutes a fraudulent click. Though it has been impossible to calculate reliable figures, some industry estimates claim that fraud rates account for between 15% and 20% of all clicks on advertisements.