Analytics and fraud-detection firm Fair Isaac's Research and Development group announced the results of its study at the InterACT Conference in San Francisco last week, revealing that as much as 15 percent of clicks paid for in PPC deals are completely bogus, the result of companies using botnets or click farms.
The second study , conducted by analytics company Click Forensics, reported similar results, revealing that in the first quarter of this year, 14.8 percent of online ad clicks were fraudulent, an increase from 13.7 percent in 2006 and 14.2 percent in 2005.
"The problem does appear to be getting worse over time," said Click Forensics CEO Tom Cuthbert. "There are greater financial incentives on content networks, and the tools to commit click fraud are becoming more sophisticated, too."
Despite these results, Traffic Dude President Scott Rabinowitz told XBIZ that the PPC method is still a solid way to effectively buy online media, and that with research and communication with online traffic and media vendors, click fraud risk can be lowered.
"People should read up on click fraud monitoring policies from current suppliers or ask their existing [or] potential online ad sales vendors what their policies are if there is a click fraud dispute," Rabinowitz said. "In most cases, any reasonable and reputable online traffic or media vendor will work with clients to make sure they are happy and not suffering economically from their media buys."
And though many online adult business owners perceive the PPC billing method to be the best choice, Rabinowitz said he recommends they keep an open mind when it comes to pricing models.
"There is a wide variety of legit traffic and online advertising sources that offer ad placement using non ‘per click’ billing standards which can be quite profitable," he said.
Joseph Milana, chief scientist in Fair Isaac's Research and Development group, said the company is looking for more advertiser participants to contribute to the click-fraud study "to help us arrive at a solid picture of the problem's size and scope across the broader marketplace and different vertical markets."
