Click Fraud In the Spotlight

With click fraud getting increasing attention in the mainstream media, search engines are under pressure to address the issue more proactively and publicly, industry experts told ClickZ News.

Last week, The New York Times ran a feature article on click fraud in its business section, covering highlights of panel discussion on the topic at Search Engine Strategies. It was one example of growing mainstream attention the topic has received in recent months. Other media outlets that have covered the issue recently include CNN Money, NPR, Newsweek, and BusinessWeek.

Such attention brings the issue out of the interactive marketing industry and before the wider investment community, to which both Yahoo and Google must answer as public companies.

“The search engines are going to have to do something more, and there’s more they can do,” said Danny Sullivan, editor of SearchEngineWatch, which is part of the ClickZ Network. “They have preventative measures in place to protect advertisers, but little direct outreach explaining what they can do about it. Maybe they will have to make more of that kind of jump.”

Transparency has not been the operative word for the leading engines to date. Most of the public comments made by both Google and Overture have been limited to descriptions of vigilant internal processes, the full details of which they say can’t be disclosed. However there are signals that this rigid commitment to secrecy may be loosening.

Yahoo’s Overture, for one, acknowledges that it needs to take more steps to reach out to the search industry, said Gaude Lydia Paez, manager of communications for Overture Services.

“There’s no doubt that when the mainstream media writes about this issue, it raises more questions, which we have to answer more publicly,” Paez said. “And I think it’s evident that we are making efforts to be more forthcoming when we answer questions in the press about it.”

Google declined to answer specific questions for this article.

Advertisers are especially eager for a clearer explanation for the click fraud-related refunds they receive from both Google and Overture. Advertisers also want to know how they can best document cases of click fraud they suspect are occurring.

For example, Tammy Harrison, president of a medical billing company called 2Kmedical, claims to have spent over 200 hours documenting an ongoing case of competitor click fraud. Although she has since gotten cooperation from both Google and Overture in handling the situation, the current process for identifying suspected instances of click fraud remains very inconvenient for advertisers, she said.

“Remember this: the search engines can’t see my data, and I can’t see theirs,” Harrison said. “This is where the process can be cumbersome, because we’re not looking at the same things. I think a better system needs to be created that allows advertisers to know whether they have been charged for a click that is fraudulent.”

Leading search engines have discussed the possibility of turning to third party organizations for help in advancing a wider dialogue, confirmed Doug Leeds, Yahoo’s associate general counsel.

Alchemist Media President Jessie Stricchiola, one of the more outspoken experts on click fraud, said the rest of the search community is eager to take part in a more cooperative discussion.

“Obviously we have a problem the CPC engines can not solve on their own, or they would have done it by now,” said Stricchiola. “If we can work together, we can do better addressing this problem as an industry.”

But not all players in the search community take the same aggressive stand. The Search Engine Marketing Professional Organization (SEMPO) recently released research that shows 43 percent of SEM agencies surveyed haven’t tracked click fraud much, but are worried about it. The research also showed that 30 percent of agencies have tracked the issue, but find it only a “moderate problem.” Based upon that research, SEMPO feels there isn’t enough momentum to support an industry-wide organization to address the issue, said Greg Jarboe, a SEMPO spokesperson.

“SEMPO recognized that click fraud was a hot issue, which is why we included questions about it in last fall’s research,” Jarboe said. “People said they were concerned about click fraud, but the next step proposed was to call on the search engines to increase their efforts to detect and stop it. It’s not clear, based on recent discussions, whether a next step beyond that has to be taken.”

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