Industry click-fraud rate increases to 14.8 percent in Q1

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Click fraud is still on the rise, according to recent pay-per-click fraud figures released yesterday by Click Forensics Inc.

The company's two-year-old independent click-fraud reporting service, the Click Fraud Index, found that during the first-quarter 2007 the search industry's overall click fraud rate was 14.8 percent, up from 14.2 percent for the fourth quarter of 2006. Click fraud was at 13.7 percent for the first quarter in 2006.

"Advertisers should pay close attention to the fact that the rate of click fraud continues to grow even though search engines have stepped up efforts to fight click fraud," said Tom Cuthbert, president/CEO of Click Forensics, Austin, TX.

Mr. Cuthbert said the real victim of click fraud is the advertiser since search engines and their content network providers make money on every click.

"Advertisers are the only ones footing the bill for click fraud," he said. "If advertisers don't track their campaigns for click fraud and share the data with search engines, search engines will charge them for those clicks. Whether you have a small or big budget, losing 14.8 or 21.9 percent or more on your ad spend is not something any advertiser should do."

The Click Fraud Index monitors and reports on data gathered from the Click Fraud Network, which more than 3,500 online advertisers and their agencies have joined. The network provides statistically significant pay-per-click data collected from online advertising campaigns for both large and small companies.

Click Forensics tracks a statistically significant number of live pay-per-click advertising campaigns and is therefore able to report statistically significant data on industry click fraud rates each quarter across all search engines. It also looks at click behavioral data -the activity that takes place after a user leaves the search engine site and hits the advertiser's Web site. This data can help eliminate clickbots and is not available to search engines.

The study also found that the average click fraud rate of pay-per-click advertisements appearing on search engine content networks was 21.9 percent versus 19.2 percent for the fourth quarter of 2006.

The industry average click fraud rate in first-quarter 2007 for high-priced search terms - $2 or more - was 22.2 percent, compared to 20.9 percent in fourth-quarter 2006, 20.9 percent in third-quarter 2006 and 20.2 percent in second-quarter 2006.

Moreover, there is a greater growth overall in click fraud in the content network space than in the search site market, according to Click Forensics.

"Content networks are more vulnerable to click fraud because search engines have less control over them and we are seeing that reflected in our quarterly numbers," said Karl Scholz, spokesman for Click Forensics.

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