New Study Finds Click Fraud a Billion Dollar Problem

BURLINGAME, Calif. — According to a new study by market researcher Outsell Inc., click fraud has turned into a $1.3 billion problem. The study found that Internet advertisers paid $800 million for fraudulent clicks, prompting many companies to reduce spending on this method of online advertising.

Click fraud is the practice of charging pay-per-click advertisers for fraudulent clicks. Scammers repetitively click on ads or use bot programs to cause a competitor to be overcharged under the pay-per-click model.

Outsell’s survey was based on “the responses of 407 online advertisers representing a cross-section of U.S. business. Their spending ranged from several thousand dollars online annually to more than $10 million.”

In the study, advertisers say that 14.6 percent of all clicks are fraudulent, and three quarters say it has happened to them at least once. It also found that 27 percent of advertisers curtailed or stopped spending on click-based advertising. Additionally, 10 percent said they intend to limit their spending overall.

“In our opinion, it is not acceptable that advertisers fund the illicit profits of the scammers,” Chuck Richard, vice president of Outsell, said in the report. “Pay per click is a really rudimentary [form of] advertising — a baby step — and it’s destined to decline and be replaced by other advertising methods.”

Recently, companies have sued Google and Yahoo over click fraud allegations, claiming the companies haven’t done enough to combat click fraud aggressively. Yahoo escaped the fate of its rival Google, settling its class-action click fraud case for $5 million in legal fees and promising to institute a variety of anti-click fraud measures. Google settled its case by agreeing to pay $90 million.

Despite widespread findings of click fraud, Outsell’s study shows that overall Internet advertising revenues grew in the U.S. in 2005, pulling in $5.5 billion on pay-per-click ads alone.

Google and Yahoo do not disclose data about click fraud, based on the fear that if the data is made public, scammers could easily circumvent its defense. Richard said the companies should act more transparently to show advertisers they have nothing to hide.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Arcom-Targeted Sites Implement Age Verification in France

Five high-traffic adult websites based outside of France have implemented age verification as required under the nation’s Security and Regulation of the Digital Space (SREN) law, after receiving warnings from French media regulator Arcom.

Goddess Lilith Launches 'Adultpreneurs' Networking Site

Goddess Lilith has launched Adultpreneurs, a new community and networking site.

Adult Shoot Location Marketplace 'FckSpace' Launches

FckSpace, a new platform aimed at simplifying location sourcing for adult productions, is now live

Florida Attorney General Dismisses AV Suit Against Segpay

The Florida attorney general’s office on Monday agreed to dismiss claims against payment processor Segpay in a lawsuit over alleged noncompliance with the state’s age verification law.

FTC Weighs Reboot of 'Click to Cancel' Rulemaking Process

The Federal Trade Commission has invited public comments on a petition to renew trade regulation rulemaking concerning negative option plans, after a federal court previously vacated a “click-to-cancel” rule aimed at making it easier for consumers to cancel online subscriptions.

VRPorn.com Releases 2025 'Annual Report'

VRPorn.com has released its Annual Report, highlighting its audience favorites from throughout 2025.

MrPornGeek Launches 'Visibility Boost' System

MrPornGeek has introduced a new paid visibility boost feature designed to temporarily increase advertiser exposure across select sections of its platform.

New Federal Bills Aim to Repeal Section 230

Members of Congress this week introduced two bills calling for the repeal of Section 230 of the Communications Decency Act, which protects interactive computer services — including adult platforms — from liability for user-generated content.

RM11 Joins Pineapple Support as Supporter-Level Sponsor

RM11 has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Mark Spiegler Named XBIZ Talk Guest for 2026 LA Conference

XBIZ is pleased to announce that famed talent agent Mark Spiegler, impresario of the Spiegler Girls agency, will join an exclusive talk session at XBIZ 2026, the latest edition of North America’s largest adult industry conference, set to take place Jan. 12-15 at the Kimpton Everly Hotel in Hollywood.

Show More