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

1. IntroductionThere have always been financial incentives to commit fraud in the advertising industry.Magazines and newspapers routinely overcharged advertisers by exaggerating circulationnumbers. Television ratings are manipulated to boost rates for 30 second commercialspots. Radio ratings are performed by surveys and are easily massaged. These sametypes of fraud schemes that have victimized traditional advertisers for years are nowaffecting the online advertiser.The internet is very advantageous to conducting business. The growth of the internetover the past 10 years has now resulted in electronic commerce worth $136 billion in theUS alone. Unfortunately, the growth of the internet has resulted in the proliferation ofinternet frauds. Fraudsters have now taken aim at the internet with new schemes toexploit the internet’s unique capabilities of speed and anonymity. Unfortunately, thesestrengths are also the internet’s weaknesses as frauds can spread across the worldovernight.With the advent of electronic commerce, comes the online advertising business model.Pay per click advertising was established early as the preferred revenue model of thesearch engines and advertisers. While pay per click is considered to be the most efficientand effective revenue model, it also has its disadvantages. Its biggest flaw is itssusceptibility to click fraud.5