Online Advertising Survival: Combating Click Fraud - University of ...

Search engine marketing companies view click fraud as clicks that convert or does notconvert.As evidenced by the varying terminology, the problem is defining what a good clickversus bad click is. There is no one agreed upon definition of what constitutes clickfraud. Google and Yahoo’s determination of click fraud differ from other involvedparties. This largely accounts for the wide disparity of click fraud estimates between thehigh end of the advertisers and third party auditing firms and the consistently lowerestimate of the search engines. The other reason is the search engines have been reluctantto admit to the actual known extent of click fraud. The bottom line is the vast majority ofclicks and impressions cannot easily be determined to be good or bad. Clicks are notblack or white and each side determines their own arbitrary definition of what constitutesclick fraud. This debate between each of the parties presents the fundamental challengefor the online advertising industry to deal with click fraud and this will be evident withinthe legal context.The estimates of click fraud have ranged from approximately 10% up to 40% of allclicks. If we even use the conservative estimate of 10%, that amounts to $ billions infraudulent clicks. EMarketer analyzed US online spending by format and the estimatedcost of click fraud (Appendix H). The study showed pay per click advertising growing atthe fastest rate among all other types of internet advertising. The incidence of projectedclick fraud increases at a similar pace and is projected to reach an astounding high of $3.515