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 © 2026 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

BranditScan Launches API, Affiliate Initiatives

BranditScan has launched its new public API and an affiliate program for creators.

Kenna James, Derek Kage Cap AEBN's Top Stars for 2nd Quarter of 2026

AEBN has revealed its most popular performers in straight and gay theaters for the second quarter of 2026.

Segpay Partners With Corey Silverstein for Legal Services

Segpay has partnered with adult industry attorney Corey D. Silverstein for specialized legal compliance and policy support for its merchant network.

AEBN Reveals Kasey Kei as Top Trans Star for Q2 of 2026

AEBN has named its top trans stars for the second quarter of 2026, with Kasey Kei landing atop the leaderboard.

Missouri Governor Signs Bill Making AV Regulations State Law

Missouri Governor Mike Kehoe signed a bill into law on Thursday requiring adult websites to age-verify users in the state, finalizing a legislative “stamp of approval” for AV rules after Missouri’s attorney general unilaterally imposed similar regulations last year.

Utherverse Launches 'Adult Game Fest' Virtual Convention

Virtual reality and metaverse technology company Utherverse is launching its inaugural Adult Game Fest convention and trade show, taking place Sept. 24-26.

Ofcom Fines Fapello $845,000 for AV Noncompliance

U.K. media regulator Ofcom on Thursday imposed a fine of 630,000 pounds (about $845,000) against adult website fapello.com for failing to comply with provisions of the Online Safety Act.

KiwiSourcing Joins Pineapple Support as Sponsor

Outsourcing and consulting firm KiwiSourcing has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

AdultHTML Introduces AI-First Development Services

AdultHTML has introduced an AI-first development service, giving clients access to experienced software developers who use AI to streamline software development.

Texas Court Orders Adult Site Domain Locked for AV Violations

A district court in Texas has issued a writ requiring domain registry Verisign to “lock” an adult website’s domain over noncompliance with the state’s age verification law.

Show More