Savvy Affiliate

Google Claims Click Fraud Hovers Around 2%, The Reality Could Be Much Higher

Click fraud is a recurring problem for Yahoo and Google.  They have been taken to court over it, they have proactively banned partners who were abusing their system, and they have maintained that they keep click fraud down to an acceptable level of around 2%.  However a new studysuggest that click fraud is much more prevalent, and accounts for 10-15% of all advertising dollars spent online!

Adsense partners accounted for approximately $4.2 billion dollars in earnings for Google over the last year.  If click fraud is actually as prevalent as that study suggests, it means that click fraud is a 500-750 Million Dollar industry!    

The study was sponsored by Fair Isaac, a publicly traded company under the ticker symbol FIC.   And there are several reasons why you might trust Fair Isaac’s review of the click fraud problem.

• They are a third party - Unlike Google or Yahoo, they don’t have an interest in whether or not click fraud is high or low.  Although this does not necessarily mean they are accurate, it does mean that they are not likely to be intentionally misleading the public
• They Know Fraud - Fair Isaac has been a respected name in the fraud industry for years.  Although they have only recently moved online, it makes you think that they know what they are talking about

So what does this mean to you?  As a webmaster, what does it mean to you that click fraud may be more common than thought?   Well if you advertise via PPC it means you have to be extra vigilant in monitoring your stats.  Double check to make sure that all your keywords are making you money.  Click fraud doesn’t mean you should give up PPC advertising… as long as you are still making money on the clicks as a whole.   If you have a profit margin on all of your PPC ads then you should maintain them.  Although click fraud is eating into that profit margin they is little that a single webmaster can do about it.  However you can check if most of your profit comes from search ads, or contextual ads.  Click fraud is more likely on ads appearing on websites - contextual ads.  If you have a positive profit margin on ads on Google’s page, search ads, and a negative profit margin on contextual ads, you should consider disabling contextual advertising, and focusing solely on search ads.