Why I think ClickFraud is far greater than imagined.

This is an opinion piece. So take it as such. To all those who have asked me. This is why I think clickfraud FAR exceeds what is being published by search companies.

1. Bad guys exist.
2. Bad guys who like to break into computers systems exist for profit. Playing Thermo Nuclear War no longer cuts it.
3. Bad guy crackers (ok, thats redundant) will exert how ever much social or technical hacking as is required to grab and sell credit cards and other digital assets. Knowing the return is decent, but the jail risk is more than trivial.
4. The Bad Guys have figured out that the risk of proving they are breaking the law with click fraud is minimal. Try explaining the difference to authorities between a blog, a splog and a website that is trying to make money from any of the many, many affiliate marketing programs that also happens to host adsense or other ad publishing network ads.
5. The Bad Guys have figured out that they look a lot more legit getting checks from google than trying to wash 10k dollars in cash delivered in a bag.
6. The Bad Guys have figured out that untold amounts of dollars are being spent on an ongoing basis by the biggest companies in the world to try to stop them from stealing data that has disputable value and is difficult to sell. Why waste time there when search engine companies, even with the maybe 20 best and brightest assigned to the problem are no match for the legions of hackers around the world who see the easy money and are happy to grab it.
7. The number of splog/fake websites being created EVERY HOUR is exploding. Based on the comments Im getting on my blog from what must be legions of boiler rooms creating marginally understandable comments , with links back to “affiliate websites” and legit email addresses in an effort to legitimize those sites. There must be just as many more in place to sign up those sites for ad publishing networks to act as hosts for fraudulent clicks

Now i have no idea how much money is being lost to click fraud. All i know is that when the black hats see easy money, they take it. I also know that they are greedy and a jealous bunch. The more they see the more they take, so you can pretty well bet that the amount of click fraud is going up by the minute.

And no amount of IP repetition algorithms are going to stop them.

Again, this is all opinion. No investigative reporting going on. Yet.

Maybe my next post on this subject will about keyword arbitrage and how its inflating numbers for search engines. Its a simple , somewhat risky, but very workable concept. I buy words on a publishing network on a CPC basis for 10c and I link to a page with outbound links on keywords or affiliate networks that pay more. So if i can buy the keyword “YoBaby” for 50c per click, and have that link to a page full of links that are paying me 5 dollars per click and more than 10pct of my users “click out”, Im making money.

It also means the Ad Publisher is getting paid twice for nonsense traffic. Not a bad business for them and the arb. The advertiser paying the 5 dollars per click… Well thats another story.

**updated june 2, with respect to hackers who thrive on finding meaning in the morass**

135 thoughts on “Why I think ClickFraud is far greater than imagined.

  1. I got totally screwed over with click fraud. If your enemies find your site, or if your competitors find your site, all they have to do is go jerk happy and click all your ads. Once that happens, your flagged, and then banned without any warning. Google Adsense is not a reliable money maker.

    Comment by Rhon Daguro -

  2. There could be a massive, world wide stock market fraud occurring right now that could threaten the integrity of the entire NASDAQ!

    Who could be the perpetrators of this unspeakable crime? Thousands of Google\’s stockholders! They could be currently protecting their Google stock investments by simply clicking on Google\’s pay per click contextual ads to vastly increase Google\’s overall net earnings, and thus ultimately increasing their own stock profits significantly.

    Why wouldn\’t Google\’s stockholders be clicking on the ads themselves, or perhaps paying people to click on them to inflate their stock price? Ever since stock market investing first began there\’s always been a strong desire for investors to hold on to their money and earn more. And Google\’s stockholders are no exception. That\’s why it shouldn\’t be that hard to believe, that hundreds, if not thousands of Google\’s stockholders could be secretly clicking on the Google ads themselves, boosting Google\’s profits and getting away with it, at least for now.

    Comment by Joe -

  3. Clickfraud is the cost of advertising on the internet. Modern day E-commerce, like a newly discovered type of cow, has its gristle, usable trim, and loss. Its like P2P, it will never die, it is a cost of doing business in the digital age, you want the convenience of an E-lifestyle? Best get used to the E-mosquitos.

    The other huge issue is, Clickfraud is not a user related problem, the internet users of the world do not care how advertisers have to work it out, or how much money they loose, the realism is that it will go on perpetually as a cost of doing business.

    And it’s always funny to hear a rant from a billionaire calling someone else greedy and jealous. Not that you are a greedy guy, I know you are not, but careful throwing stones man. *poke* all in good fun though…

    I’m a Chef, There are just some parts of doing business that get lost/wasted. It’s part of nature. Take it or leave it

    Comment by jack -

  4. I work for a company that does seo and internet marketing for a certain channel. We have by choice gotten away from PPC as much as possible due to the fact we are no longer seeing results from the expense, basically the ROI is no longer there. It’s a shame because even very niche terms are becoming priced out of reason due to the escallating occurance of people escallating prices to hurt others. PPC has lost almost any value to a business that is truly competitive in the current marketplace.

    Comment by Pam Ditto -

  5. I work for a company that does seo and internet marketing for a certain channel. We have by choice gotten away from PPC as much as possible due to the fact we are no longer seeing results from the expense, basically the ROI is no longer there. It’s a shame because even very niche terms are becoming priced out of reason due to the escallating occurance of people escallating prices to hurt others. PPC has lost almost any value to a business that is truly competitive in the current marketplace.

    Comment by Pam Ditto -

  6. In addition to “click exchanges”, there is a proliferation of sites which PAY people to perform click fraud. Some of the “made for adsense” sites advertise here and you can get paid up to one US cent directly into paypal per (fraudulent) click you make. Paypal fees, middlemens’ profits, Google’s profit, advertisers are probably losing at least 5 cents per click.

    Comment by :D -

  7. trip. is it possible that url hosts may inflate click and unique visitor stats?

    Comment by HisBoyElroy -

  8. Other click fraud cases include bidding up keywords that your competitors want and clicking on your competitors’ ads to drain their budgets. Sad but true.

    Comment by Become a consultant >> Andrea -

  9. I think that if someone is dumb enough to use PPC without understanding they might lose alot of money on fake clicks then they deserve it. My business is highly competitive and I know better not to use PPC. Natural rankings, word of mouth, inbound links from websites I either designer or provide SEO/SEM for and ads that I post on CraigsList are how I make ends meet. Anything else is just extra and if the extra will take more out of my pocket than it would bring in then I obviously would not use it. PPC is one of those things.

    Comment by Brandon Connell -

  10. The Heat got 12 more minutes and we are IN THE FINALS. The Pistons are toast. I hope the Mavs are ready to finish off the Suns tomorrow night so The Heat can meet the Mavs in the Finals.

    Heat in 7 over the Mavs to win the Finals.

    Comment by eddie -

  11. “Now i have no idea how much money is being lost to click fraud. All i know is that when the black hats see easy money, they take it.”

    There’s probably a lot. Just have a look at the current settlement that Google has with disgruntled advertisers.

    But if Google and other ppc websites don’t mitigate against the problem, they will lose income.

    Anyway, black hats won’t win in the long term.

    Comment by Share Trading -

  12. A note to Mark Cuban –

    I have personally followed you for years now. I too am a basketball fan since age 5 and played a little in college. Your passion as a business leader and your commitment to your convictions are refreshing. I think a lot of people in Management in the NBA are losing site of what you could bring as a business leader – not just a team owner. Yes, there are those who say a little refinement on your part would do wonders. Well I for one think you could teach a lot of us how to succeed in business and a whole lot about refinement. Refinement and character do not come when you buy an Armani Suit. KEEP UP THE GOOD WORK!!!

    Comment by Scott Decker -

  13. I LOVE HOW YOU PUT UP THESE GAY BLOGS TO TRY TO MAKE PEOPLE THINK THAT YOUR NOT THINKING ABOUT THE CONFERENCE FINALS SERIES. YOU ARE GAY.

    Comment by M5FROMNS -

  14. Our quiet little PHPBB forum is on the lists of Russian spammers, who have been registering increasing amounts of bogus accounts (with links to snuff movies, porn and online pharmacies). What started out as one or two a week is now over a dozen / day. Obviously link pharming, but I can only see it getting worse.. We prune them out several times/day – I’ve come across “orphaned” blogs that are “phull” of their stuff.

    Most of these “registrations” are via zombie PC’s, btw.

    Ooroo
    Callan

    Comment by Julian Perry -

  15. The best idea I’ve heard as of yet to reduce click fraud: make people “confirm” their click by doing a word verification like you see to register for sites or post blog comments. It could be a 2 or 3 character pop up that would take a second to fill in.

    Now, this will likely never happen b/c Google/Yahoo would lose a ton of money initially. But imagine say if MSN did it and could eliminate 95% of click fraud by doing that? I’m sure that would attract a TON of attention from advertisers who would feel safer advertising there. Advertisers would have much higher conversion rates knowing that people actually meant to click their link.

    Comment by Adam -

  16. “We can’t tell you how we find fraudsters – because the fraudsters will use it against us.”

    Uh huh. I buy that. Yeah.

    Comment by Colin Toal -

  17. Word on the street is for advertisers to opt out of the settlement.

    http://www.clickfraud.com/click-fraud-advisory-clickrisk-060206.pdf

    Cheers,

    Simon

    Comment by Simon -

  18. A lot of advertisers still get top return on investment through PPC campaigns. If click fraud is rampant, what does that say about traditional media ?

    Comment by Paul Elosegui -

  19. I don’t have time to read through all the comments here, but I recently read bona fide test-based research that showed cases of Google being unable to detect 29.5% of the fraudulent clicks from an orchestrated test ppc campaign.

    Comment by Mike -

  20. I’m sure that some botnets exist solely to perform clickfraud on competitor’s sites in order to make Google step in and take away the competitor’s income stream. By taking away the money, the fraud artists hope the competitor will stop trying to compete.

    This puts google in a real bind because they have no one to punish, so they make the problem go away and the clickfrauders win. Its a theory.

    Comment by maxpower -

  21. I have written a lot about click fraud at ads.typepad.com if anyone is interested in reading more.

    I think a lot of the comments have covered most of the misconceptions about click-fraud but there are a couple things missing. First click fraud steals from real publishers, not advertisers. See my post here http://www.triggit.com/blog/2006/02/27/click-fraud-2/. The value in advertising is created by real publishers whose readers buy things. Every time fraud happens it is their value that is being stolen. Even with all the dumb money in the market, there is still considerable market correct for the fraud.

    Additionally. Click-fraud is not, confined to the content network. Google lets publishers place a search box on their pages and shares revenue from the ads that people click on once they get to Google. That means a botnet simply needs to route through a splog to google before it clicks on an ad. Simple stuff.

    Comment by Zach Coelius -

  22. Mark you are writing the same stuff that has been recycled on SEO blogs for years. Please keep your posts unique to your own thoughts.

    Comment by Dwight K. Schrute -

  23. Click fraud Truly sucks.

    Comment by Jim -

  24. This is why the click 2 call model should theoritcally take off. If there was anything available today, I’d take all my money out of Google, Yahoo & Microsoft and invest in that.

    Comment by Eddie -

  25. These people committing click fraud in this way, setting up splogs, MFA sites, etc., are neither hackers nor crackers.

    They’re grifters. Con men. Ripoff artists. Scammers.

    Comment by Michael Hampton -

  26. Great article. People are doing anything these days to make a buck.

    Comment by Fishin Dog -

  27. Mark,

    CPC advertising is fully quantifiable. Heck you can hook up Google Analytics and easily get ROI numbers for Adwords. Even without this, setting up a system to track the performance of traffic from each keyword isn’t that hard.

    Now, you are fully correct in that most people are new to this and will not do it… but I have little sympathy for them, frankly. I mean here’s one of the first marketing channels where the old maxim you quoted doesn’t have to be true – you CAN know which half works. If you choose not to, or don’t learn the minimal amount in order to know that this is possible, you’re just being a bad business person. That’s on you, not the search engines or others…

    Comment by rick gregory -

  28. This article about botnets is certainly good background for this discussion.
    http://www.csoonline.com/read/050105/extortion.html

    Comment by Andrew McFarlane -

  29. As an advertiser on Google AdWords for over 3 years, I’ve always disabled ads on Google’s Content network. This minimizes click fraud by not being part of the public AdSense network – anyone with an AdSense account can monetize. Click fraud (AdSense on pages of Google’s partners) or competitors draining your budget (Google Search network) may still happen but less likely…

    Comment by Nick Pang - Nintendo Wii Rule! -

  30. Click fraud on a small scale has been an annoyance for search marketers for a long time. The real issue, however, is with the whole framework of contextual marketing (i.e. YPN, AdSense, etc). The incentive to commit fraud is great as is the opportunity. No amount of fraud detection can or will stop efforts to defraud the system.

    For example, the recent article on the Clickbot.A virus http://www.net-security.org/secworld.php?id=4002
    pretty much shows how this can be done on a large scale in a sophisticated fashion. It would be impossible to detect an operation like this is the perp was using 1000’s of sites and multiple accounts to receive payment.

    Hackers 1 – Search Engines 0

    Comment by Stuart Meyler -

  31. I am a hacker and I take offense to you implying all hackers are criminal. It is like me saying all billionaires are greedy scumbags who will do anything to make a buck.

    Comment by George -

  32. The bad part is, it isn’t just hackers. People think splogs, and other made for adsense websites is a reputable business.

    On youngentrepreneur.com forums people recommend this as one of the best businesses to start. It isn’t a business, it’s a scame. Furthermore, its filling up the net with useless junk.

    Comment by Brian Balfour -

  33. Actualy, Michael, the thing about clickfraud is that it is not illegal at all.

    there are no laws saying you cant click on a link on the internet, even if you don’t intend to buy something.

    now clickfraud is certainly against the Terms of Service at Google, but there’s no law against it- thus it isnt technically a crime at all.

    which is why it is so attractive to people looking to make a fast buck. even if they get caught, the worst that happens is their adsense account gets shut down.

    Comment by james -

  34. About keyword arbitrage: yes that’s basicly the way it works.
    You buy cheap targetted traffic and monetize it with adsense or affiliate programs.

    But it’s not that easy, there’re too many factors to consider:
    1. A percent of your visitors who will actually buy something through your affiliate link may be very low if the site is of poor quality.
    2. All areas have very high competition, you’ll have to find keywords with a relatively small number of advertisers and high paying affiliate programs to succeed etc..

    Comment by Michael -

  35. You wouldn`t even know how to define the word “Hacker”…poor spoiled kid.
    You`re a rich brat that had never to work for anyting in his life, but got everything laid out for you by your father.
    Well have a good 1

    Comment by KennyMCormick -

  36. Very interesting post Mark,

    1. Click fraud has nothing to do with splogs, poor quality sites created for adsense, search engine spam and links in comments on your blog😉
    Click fraud is illegal, while all the rest are just not “within the google tos”, but are still making money to adsense publishers and google, and providing targetted traffic to advertisers. That’s why adsense is ignoring it by most part.

    2. Click fraud is indeed the largest problem for adsense/google, but it is possible to detect most of it and adsense actually finds and bans almost all the accounts involved in it.

    regards, Michael

    Comment by Michael -

  37. Money money money… Hackers consider jail time trivial? Hackers do not even “consider” jail time.

    @acid phreak/mod
    You are exactly correct – Hacker motivation is only marginally focused on money.

    @Mark
    As a salesman by trade YOU think of everything from a money angle. There is nothing wrong with that it is in fact quite refreshing, but hackers are motivated by something different.

    For instance, hacking video games… no money in hacking video games, but if you had any idea the effort that is put into break each and every patch of a game so people can Wall Hack, Radar, Auto Aim, etc. it is breathtaking the tools and communities game hackers have created.

    Hackers don’t think of jail time because most 90% or higher are not criminals. They may Spam, build morally questionable websites, hack a video game, make ten copies of a movie, etc. all while never breaking any law or treaty.

    Only very small groups are stealing movies, CC#’s, bank accounts, breaking into people’s cell phones, illegally Spamming, creating viruses, etc…

    Comment by Adam -

  38. Hacking in the purest form is about exploring the world around you, in an unconventional, clever, yet moral way. It is constructive, not destructive, and is passionate and boundless.

    In this sense, legal constraints are not a material concern to the hacker — and sometimes they’re overlooked, for sake of practicing the art. 😉

    –ap/mod

    Comment by acid phreak/mod -

  39. Hackers, or crackers, are becoming a pain. I hate typing a password into a computer and I am always nervous about using Ebay and Paypal after my account was hacked into. I love both of those services, but I just get tired of worrying sometimes about if I’m going to wake up and my account be empty the next day.

    Comment by Ron Jumper -

  40. Here is an example of a Human Click-botnet, http://www.iwon.com.

    From their site:
    “Once you have registered, you will automatically collect entries for clicking on links across the iWon site. On the iWon home page, the number of entries a link is worth is dependent on the link’s color: Red links are worth 10 entries, green links are worth 8 entries, and blue links are worth 5 entries. (On all other iWon pages, all links – regardless of color – are worth 5 entries.)…”

    Think this encourages fraudulent clicks?

    Comment by BigJuJu -

  41. click fraud has been around as long as PPC advertising has. it’s just getting more and more prevelant has more and more people (and companies) adopt this style of advertising. and it’s not like they are going away (PPC or click fraud) if latest numbers are any indication.

    the problem isn’t identifying the issue anymore. that was done a long time ago. the problem is what is going to be done to stop it. when you have foreign companies that exist solely to conduct click fraud, then you start to realize how big the problem is. however, we still haven’t gotten past the identification stage, even tho we all know it’s going on.

    the question is, what does Google, Yahoo, MSN Search, et al plan to do to combat this problem? better yet, will these guys do anything at all? remember, search engines/ad providers BENEFIT from clicks, real or otherwise. is there an answer? and please don’t say captchas… oh wait, that’s for comment spam. 😉

    great fourth quarter last night, btw. dirk was UNSTOPPABLE…

    Comment by wpn_chris -

  42. Mark –

    First time reader, long time basketball fan, long time “I think you’re a nut for sitting on the bench with the team” guy.

    That being said, the article and your comment concerning the market correction and “dumb money” might be the best article I have read about PPC Internet advertising in a long time. Click fraud IS a major problem as I have personally encountered (as an IT security admin and programmer) several botnets that very covertly generate automatic advertising clicks on a very large scale. In addition, through social networking sites, large circles can be developed that create “human-nets” where clicks are exchanged (much like links are exchaged for page rank purposes).

    Great post and I subscribed to your RSS feed now to see what other insights you have. Good luck in the playoffs.

    – Hagrin

    Comment by Hagrin -

  43. Yes, the market will correct itself. However, “market correction” isn’t some magical black box that just acts and causes numbers to change. It happens because people realize things and then begin to act differently. People stop buying a product once they get scammed and that information begins to spread. You and I and everyone reading this is part of the market correction – word is spreading about the extent of clickfraud, and soon advertisers will begin shifting their ad dollars. THIS is the correction itself – “you’re standing in it.”

    Comment by Y. Wong -

  44. If you want to limit your click fraud, turn off Adsense and only use Adwords. I would say the majority of useless BS clicks are from Adsense. Why? Because this the program all the spammers use to create click fraud…I mean really…have you EVER clicked an Adsense ad? I haven’t. Unfortunately, I saw that something like 40-60% of Googles revenue comes from Adsense. So they have zero incentive to fix it because Adsense and Adwords is the ONLY way Google makes money.

    The other BS thing about Google is that they want to fight Spam with algorithms. This is crap. Every webmaster knows by heart what companies use spam in their industry and which of those spam pages rank high. I report pages every day to Googles spam report, but nothing changes. If Google set up a spam reporting system that actually worked well with high ranking spam pages being removed immediately, maybe that would help. I don’t know. I just know that for every high value keyword for my company there is at LEAST 2 or 3 spam pages that show up on the 1st page in the search results (usually above mine). This is unnacceptable, but most people don’t seem to care…It drives me crazy…Do no Evil…ha

    Comment by me -

  45. If you want to limit your click fraud, turn off Adsense and only use Adwords. I would say the majority of useless BS clicks are from Adsense. Why? Because this the program all the spammers use to create click fraud…I mean really…have you EVER clicked an Adsense ad? I haven’t. Unfortunately, I saw that something like 40-60% of Googles revenue comes from Adsense. So they have zero incentive to fix it because Adsense and Adwords is the ONLY way Google makes money.

    The other BS thing about Google is that they want to fight Spam with algorithms. This is crap. Every webmaster knows by heart what companies use spam in their industry and which of those spam pages rank high. I report pages every day to Googles spam report, but nothing changes. If Google set up a spam reporting system that actually worked well with high ranking spam pages being removed immediately, maybe that would help. I don’t know. I just know that for every high value keyword for my company there is at LEAST 2 or 3 spam pages that show up on the 1st page in the search results (usually above mine). This is unnacceptable, but most people don’t seem to care…It drives me crazy…Do no Evil…ha

    Comment by me -

  46. I agree with Mark that clickfraud is a huge problem. I wrote an article outlining a very possible way for these “hackers” to take advantage of these PPC systems. Zombie networks of real PC’s would ensure virtual transparency to the PPC filters. Since each “click” is coming from an actual IP address and the amounts of clicks from that address are low, the PPC campaign cannot accuse the website owner (hacker) of fraud.

    The other joke that people should be aware of is the clickfraud settlement Google is trying to offer. It limits refunds to credits only and at percentages on the dollar. Plus YOU have to prove the fraud.

    Link to Article
    http://www.marketingpilgrim.com/2006/02/google-attacked-by-zombies.html
    Link to clickfraud settlement posts
    http://www.marketingpilgrim.com/2006/05/click-fraud-settlement-due-to-fear-of.html

    Comment by Mike O'Krongli -

  47. Interesting point about the dumb money. Certainly, as there are more unsophisticated/naive keyword purchasers, the incentive to commit click fraud grows. But I think that’s more of a survival of the fittest mechanism – the dumb money briefly drives up my costs, or drives down my position, but ultimately they lose money and leave the market. Or they learn how to adapt to the click fraud and prevent as much of it as they can like my company does.

    As someone who’s been working in this area for the past 5 months for a major travel website, I will say this is one of the ultimate quantitative businesses. In fact, I can tell you which half of my advertising is working, to the penny. I have keyword level data on every one of our million-plus keywords, so I know exactly how much we spend and how much we receive in revenue every day for every keyword. It’s asymptotic, but if I’m perfect at my job, I should never be paying for a keyword that loses money.

    Anyways great point about the dumb money. While I don’t fear click fraud very much at all, it might be costing me money indirectly by the way it affects my competitors.

    On a random note… my company won a couple People’s Choice Webby’s, and recently asked for submitted ideas on what our 5-word acceptance speech would be. Knowing BlogMaverick won an award and Cuban would be speaking, my submission was “Mark Cuban stole my wallet.” Sadly, our VP of marketing didn’t like it or didn’t get it.

    Comment by Mike L -

  48. Google loves the “market correction” hypothesis as it allows them to rake in another x-million dollars per day while they wait for the market to correct. If they were really serious about this, they would create a “bonded site” program where web sites are reviewed and audited.

    It seems like they could charge a premium for ads in that program and STILL offer the unaudited ad rate.

    Great game by the Mavs last night, here’s my take:
    http://farlane.wordpress.com/2006/06/02/nba-comix-things-i-think-with-avery-johnson/

    Comment by Andrew McFarlane -

  49. Check out this mavs promo

    Comment by Jose Gonzalez -

  50. Please check out this mavs promo

    http://www.jgonzo.com/mavs.html

    Comment by Jose Gonzalez -

  51. Littyhoops above says “.. it pretty obvious that click fraud is a minor problem for which advertisers are willing to bear the cost”

    I’m not sure advertisers bear the cost at all. If I were an advertiser, I would assume a certain amount of click fraud and lower my bid accordingly. I’d do the same in print advertising, if I thought a magazine’s circulation was inflated.

    That said, I think the cost is borne by the legitimate non-sprog sites- they get less revenue than they otherwise would and they subsidize the crackers.

    Comment by Kelley Ritchey -

  52. try having a chat with one of the leading “click fraud” companies: i think you’ll find their experience comes from 1st hand experience… i.e. they know exactly how to fraud clicks via very very sophisticated stuff! i agree, it’s huge

    Comment by kayak blog -

  53. Clickfraud is here to stay as viruses, trojans, botnets, etc all are; no solution will ever be perfect to elliminate it entirely. The trick is to keep it under control. I think just by advertisers wising up a self-correction will help, and at the same time the ad publishers/search engines will innovate continually and hopefully become ever more transparent for the advertisers benefit.

    On a related note, CPC might evolve into more efficient forms completely a la Snap.com’s Cost-Per-Action system that only charges advertisers once an actual purchase is made. (see http://blog.snap.com/2006/04/17/how-cost-per-action-eliminates-click-fraud/)

    PS: Nowitzki kicked ass tonight!

    Comment by Haig -

  54. There’s one big difference- magazines, newspapers, television, and radio all have auditing systems in place. When an advertiser buys airtime/printspace, they get a notarized signed statement from the publisher that their ads actually ran or were distributed.

    Or maybe you guys forgot all the trouble some folks in new york got into last year when it turned out they were inflating their newspaper subscription count.

    With search engines, there is no accountability at all. None. Zip. Nada. No oversight, no auditingm.

    It’s just “Trust us.”

    No thanks. How about some third party auditing instead?

    Comment by james -

  55. I think Littyhoops made an accurate observation.

    The market will eventually correct itself. Advertisers will stop advertising if it is not effective.

    Look at it from the point of say printed ads, Say ABC Company decides to do a full page ad on their product sold in XYZ stores

    a) Some % of the readers of the said publication might see it,
    b) Furthermore to be intrigued enough by it for whatever reasons to be interested in it,
    c) Make an effort to connect with the ad by heading to the store/website/ retail outlet whatever to check out the product
    d) Make the final purchase

    I believe the problem lies more in Advertisers choosing the correct form of marketing to work with and how they measure improvement in their bottom line.

    If any company takes an advertising campaign and do not see RESULTS after a while, you bet they will stop as soon as possible and rework their strategy.

    Comment by Jacob Pang -

  56. To the folks that feel that this is a self correcting problem. Logic does say that if the results decline, then the market for the keywords will adjust along with it.

    Like the stock market , it doesnt work that way.

    First, there is the old maxim, I know only half my advertising works, I just dont know which half. True, CPC is far more quantitative from other forms, but its still not pure in qualifying cost per sale.

    2nd, this is still relatively new to a great part of the market. So like the stock market, new money is often dumb money. As dumb money continues to come in, clickfraud only escalates because the volume of smalltimers aggregates into huge amounts of money

    3rd. There isnt a real time “exchange” if you will that small marketers know how to use. All the SEO tools that high end users know how to use to track pricing dont help the “I need to try this google keyword thing out” buyer.
    Again, just like the stock market.

    I have this old saying i try to remind myself of when spending money in something new. You always look for the fool in the deal. If you dont find one, its you.
    ]
    People are pouring in money without having a clue. Those people are easy pickings.

    im sure the market will evolve and mature at some point in the future, but its not now, and its not soon
    m

    Comment by Mark Cuban -

  57. hey any one tell me how to increes trafic in my site and how to incress page rank of our site any one plss send me some info abt this in this id aamirvirani@hotmail.com

    Comment by john -

  58. Click Fraud is an intersting topic, one which will cost you an estimated 20%. This is an interesting article with valuable information. What we and many other webmasters are starting to do is invest some of our marketing dollars into a click fraud prevention/protection software. If you are looking for the best one for your company i recommend you take a look at: http://www.trackingsoftwarereviews.com

    Mike Baker

    Comment by Mike Baker -

  59. Based on the comments, I’m not sure if this post was about PPC or the MAVs. If PPC (adwords) goes away does that mean Google’s revenue goes away too?

    Comment by philleto -

  60. For instance, hacking video games… no money in hacking video games, but if you had any idea the effort that is put into break each and every patch of a game so people can Wall Hack, Radar, Auto Aim, etc. it is breathtaking the tools and communities game hackers have created.

    Comment by runescape money -

  61. But imagine say if MSN did it and could eliminate 95% of click fraud by doing that? I’m sure that would attract a TON of attention from advertisers who would feel safer advertising there. Advertisers would have much higher conversion rates knowing that people actually meant to click their link.

    Comment by wow powerleveling -

  62. I agree that there are lots of bad guys, hackers and crackers. This is a phenomenon. Nobody can stop them. But for many times this thinks are provocated, indirectly, by the affiliates agencies.
    For example check how some searh engines provides for a simple query more than half of the results in the first page as sponsored links, links which are not so appropiate by what we are searching. This is not a kind of ClickFraud, to ?

    Comment by Sportlane -

  63. I work for a company that does seo and internet marketing for a certain channel. We have by choice gotten away from PPC as much as possible due to the fact we are no longer seeing results from the expense, basically the ROI is no longer there. It’s a shame because even very niche terms are becoming priced out of reason due to the escallating occurance of people escallating prices to hurt others. PPC has lost almost any value to a business that is truly competitive in the current marketplace.

    Comment by Pam Ditto -

  64. Guys listen – Littyhoops has got it right. If I buy YoBaby for .50, and have a bunch of advertisers on my page willing to pay $5.00 for a click… and if half my clicks are fraudulent, the $5.00 advertiser is going to wise up and only offer me $2.50 per click. So then they end up paying $5.00 per “real” click.

    It’s that simple – it corrects itself just fine, as most advertisers can presumably handle the 6th grade math involved in this sort of thing.

    And there’s two reasons why click fraud just doesn’t matter right now: 1) because of the market correction I just referenced, and 2) because keyword arbitrage, as well as the $5.00/click advertisers that pay the keyword arbitrage websites, are all making so much money they don’t know what to do with it.

    Comment by Mike L -

  65. I have seen AdSense revenues on both my sites and those of my peers drastically drop over the course of the last year. I am positive that this is due to clickfraud. The only people winning this game are Google/Yahoo/MSN (the guys hosting the fraud bait) and the fraudsters themselves. But because Google & co. are making out like bandits, they don’t exactly have a lot of incentive here.

    Comment by Scott Johnson -

  66. my previous comment is directed to Brian L.

    Comment by Shaun -

  67. As a publisher who once hosted a Google ad banner, I became as much a victim of click fraud as the advertisers. One fellow who posts regularly at the DailyKos disagreed with something I wrote and chatted up his dislike on his Kos diary. One of the others Kos users suggested a “Click Attack” on my ad banner. Just because they disagreed with my political views.

    It isn’t always scammers or, as someone said, Joe Sixpack. It’s buttheaded people who want to cause you trouble.

    About a month after the posts on the DailyKos, both Google and Bidvertiser closed my accounts due to suspicious activity. Coincidence? I don’t think so, but I was automatically guilt in the eyes of Google.

    The other problem is no one at the DailyKos bothered to respond to my emails voicing my concern over the threat. Gee … how shocking.

    I am Joe Sixpack, hoping only to make enough money so my website costs nothing out of my pocket. Won’t take much. I don’t think guys like me should be penalized or categorized because I’m not a big company with programmers to create ad campaigns to generate revenue. I find the implication that I’m some moron clicking my own ad banners rather offending. But, I guess it is easier to use such a broad brush when trying to define a problem. It takes very little thought.

    I have since found other ad banner sources that let me set a flat rate charge for anyone that wants to put a text ad on my site. No “per click” charge to the advertiser and I set the cost. Makes a lot more sense, especially when the prospective advertiser can read my website stats, at the banner service website, and choose if they want to advertise.

    Comment by Robert -

  68. yes, you think that because you don’t know much. confusing good and bad is the root of all problems associated with the troubles of today, in all spectrums of our society. personally, i’m with littyhoops. (avid reader of blogmaverick and also agree with his NBA comments- sorry, mark)

    Comment by Shaun -

  69. I agree… I think that click fraud is huge.

    I know of people encouraging others to just click the ads on their forums and what not.

    I’ve tried adsense. And I have made very little money. But that is ok.

    When I visit sites, I will only click the ads if one of the ads catches my eye… with something that I’m looking for. (Which is usually some programming ressource thing)..

    Anyway.. you’re Mavs are up as I write this dude. Hope you’re having fun @ the game. It’s on my TV.
    😉

    – Yves –

    Comment by Yves -

  70. As far as I’m concerned, you can lump “hackers” and “crackers” together as much as you want. I think are a lot bigger problems than confusing the two.

    Comment by Brian Laesch -

  71. “It seems that icerocket or another search engine that specializes in blogs could use its data to create heuristics that identify “trustworthy” blogs.”

    See SiteAdvisor.com and how it works with Google search results.

    Comment by Jim Lippard -

  72. I agree with Tyler above – it is Joe Sixpack clicking on his own links, and his friends trying to help him out, that breaks this system. In order to make real money, the kind a hacker wants, it has to work in big numbers. IP dupes do work, and thats why you see those made for adsense sites that host only ads. The hackers cant just click on all their own ads, but they can damn well sucker in a coupla hundred fools to do it for them.

    Thats not exactly a broken system. The sites get real views, just through a seedy back alley.

    And like ‘Littyhoops’ said above, there will be a market correction if these things get too bad. If it were up to me, I’d pay a little extra to not have to see any more of those flash ad games where you have to punch/shoot/hit the target/monkey/saddam/osama and win the ipod/xbox/freecreditreport. But that’s just me.

    Comment by Derek Tumolo -

  73. It seems that icerocket or another search engine that specializes in blogs could use its data to create heuristics that identify “trustworthy” blogs. That is, those that actually publish real, original content. While it’s entirely possible that these blogs could also be commiting click fraud, the likelihood is much less than with splogs. I don’t know what these heuristics might be. Referenced by a respected blog? One degree away from several respected ones? Often selected from search results? Widely subscribed RSS feeds?

    Then, advertisers could choose a minimum level of trust when buying pay-per-click advertising. Icerocket could offer a specialized PPC advertising network that targets blogs and minimizes click fraud abuse. Could Google do this? Perhaps, but it might choose to just sit quietly and collect its ill gotten gains instead while others innovate around it.

    Comment by Steve -

  74. Long time reader, first time commenter….

    Why is there so much speculation on click fraud. Shouldn’t the market correct itself? If it really is a problem, advertisers will stop advertising, the search engines will lose money and work to prevent click fraud. As long as paid search continues its tremendous growth, it pretty obvious that click fraud is a minor problem for which advertisers are willing to bear the cost.

    I do realize that there are arbitrage opportunities and hacker/crackers are making money on paid search without contributing any real value. But heck, there are arbitrage opportunities in every market in the early stages.

    Love your blog, love your passion as a Mavs fan, can’t stand nowitzki or having to see you bitch on the sidelines 20 times a game. But Nash annoys me even more and Tim Thomas is the absolute worst so good luck getting to the finals.

    Comment by Littyhoops -

  75. “I can tell you that it would take an immense amount of skill and time to profit from click fraud at a large scale. As the number of clicks on a network site goes up, the easier it becomes to figure out whether or not fraud is going on.”

    No, it wouldn’t. All it would take is a botnet and pushing adware out to every infected system, which is happening daily in very large numbers. Listen to my interview on botnets on The Security Catalyst: http://www.securitycatalyst.com/2006/05/23/botnets-pt1/

    Also see Ben Edelman’s work on click fraud, e.g.: http://www.benedelman.org/news/040406-1.html

    Mark’s right, this is a real issue.

    Comment by Jim Lippard -

  76. Keyword arbitrage to CPC sites typically does not work well — too many people click the “back” button rather than click the CPC links on your site.

    However, it can pay off big time on affiliate marketing if you have the credit line to feed the beast (Google). I know people who make a shitload of money doing this, and it’s entirely legitimate because the end result is a sale, not a click.

    Comment by Derek Scruggs -

  77. Click fraud risk is only significant in certain situations, I think. Publishing ads on networks like AdSense is risky. That is where the profit incentive that you’re so worried about comes in. On search engine owned sites, however, there is far less chance of click fraud due to the absence of that incentive.

    I think your fear of hackers is unjustified. I write computer software. I can tell you that it would take an immense amount of skill and time to profit from click fraud at a large scale. As the number of clicks on a network site goes up, the easier it becomes to figure out whether or not fraud is going on.

    Your real fear should be the average Joe, the guy who is NOT a hacker. He’s the guy who sets up a blog talking about model airplanes, and joins a network to publish ads on his blog. He wants to supplement his income, so every now and then he clicks some ads, and encourages his friends and readers to do so as well.

    Average Joe only gets a few clicks here and there, so only a little bit of the advertiser’s dollars are wasted on him. But wait — there are billions of average Joes on this planet.

    Now imagine 50,000 average Joes with blogs about model airplanes. If you are selling model airplanes, your ads are getting displayed out there a lot. And all of these average Joes have friends that click their ads supportively. Now as an advertiser you are paying for a lot of clicks. The clicks are real, but not from anybody who wants to buy anything.

    Since the clicks will likely look legitimate, it comes down to intent – did the user click the ad just to click it, or did they have a genuine interest in the advertisement? It’s not so easy to tell, and that’s where advertisers lose and ad publishers win.

    Comment by Tyler -

  78. a hacker is someone who likes to take things apart and put them back together in order to learn how they work (reverse engineering).

    what you’re talking about is “crackers” (not the kind you put in soup).

    the only reason i mention this is because the lumping together of hackers and crackers is part of the problem that has come since the arrival of recent technology. it is also part of the reason average americans are afraid to tinker with computers and learn how they work on the inside.

    it’s a cool post, cuban, what’s your take on the net neutrality debate?

    Comment by Shaun -

  79. Mark,

    I agree with just about everything you’ve said here, but may I please ask a small favor?

    Please stop using the word ‘hacker’ to describe people who commit criminal acts with computers. Ninety nine percent of hackers are ethical and would never do anything criminal and very vew of the scammers involved in the type of activities you’ve described are hackers anyway.

    Comment by G. Hilts -

  80. Mark, at the end of the day companies who are advertising on the Search Engines need to be very aware of the post conversion percentage from their marketing efforts. If they see some kind of erratic trend, it should raise a red flag and look to contact the engines.

    With our internal tracking system, we know how our conversions look like from each Engines parter. i.e AOL has X clicks and X conversions. If you see an IP address or certain site bringing enourmous amount of traffic with no sales/leads, you need to investigate.

    Comment by Andrew Beckman -

  81. Good points all. It is nice to see that Google is responding to the keyword arbitrage issue by charging higher fees to websites that do not offer content. I don’t think it will solve this problem, but at least it is a step in the correct direction.

    Comment by Tom Schmitz -

  82. God loves you and Mav.My best wishes to you.
    I believe you can be NO 1 in NBA.

    Comment by LeonYi(Chinese) -

  83. What I find most amazing in all this. Google claims to have a policy on accepting websites that want to run Google AdSense. You try and get inthere. You will receive a “thank you for understanding” e-mail.

    I wonder how does Google check those? You would think Google checks on content. And many fake sites have all but content. Is Google deliberately accepting them because they now it will bring in money anyway?

    Comment by Piet Nutbey -

  84. I own my own company and sell very very niche products to the networking and telecom world. Our target audience is very very small. Our website functions more as a yellow page ad or catalog for customers to find the company and our wares. We have done click advertising on both Google, Yahoo and others. We experience less than $10/month in click expense on Yahoo and others. We were getting billed in the range of $300 to $600 month in click advertising from Google and on the exact same terms. Do I think I was experiencing clickfrad. YOU BET!!!! There is no way my target customers could generate that type of activity. Furthermore, when we stopped our click advertising we suffered on our search rankings. It feels like extortion. The integrity of the internet has been hurt dramatically over the past 2-3 years.

    Comment by Kevin Brown -

  85. the relationship between the ad engine and the advertiser is nearly anonymous. people forget that the web is here because it fosters relationships between people as well as it does clicks between PC’s. when advertisers hone in on this fact, they’ll begin demanding better relationships in their ad-spends.

    conversion metrics get around much of the problem. if you’re not using google’s conversion tracker you absolutely should be. most of the clickbots won’t fill out a form or buy something with a credit card. use this information to your advantage – experiment with different kw’s that mean roughly the same thing and play with making multiple landing pages with different conversion points to see what’s going to give you the best bang for your buck.

    if you’re not actively managing your ad-campaigns and tossing money at expensive kw’s, then yeah – you’re being the fool

    Comment by techorb -

  86. I own a large commercial website, and just stopped all advertising after reading up on this issue. I’ll make money off the goo ad$en$e revenue, but no more direct advertising for my own company, especially on the internet. http://online-gambling.orgfree.com/
    I simply lowered my prices, include more free stuff with all my sales, and will now depend solely on word of mouth. I’m taking a hit, but I’ll win in the long term.

    Comment by Online gambling. -

  87. I wish something can just be done about this and I believe at times though publishers are wrongly punished.

    Comment by Lindsay L -

  88. I own a large commercial website, and just stopped all advertising after reading up on this issue. I’ll make money off the goo ad$en$e revenue, but no more direct advertising for my own company, especially on the internet. I simply lowered my prices, include more free stuff with all my sales, and will now depend solely on word of mouth. I’m taking a hit, but I’ll win in the long term.

    The market speaks.

    Thanks to Mark and everyone else for the valuable input.

    Cheers

    Comment by Roger Wasson -

  89. I own a large commercial website, and just stopped all advertising after reading up on this issue. I’ll make money off the goo ad$en$e revenue, but no more direct advertising, especially on the internet. I simply lowered my prices, include more free stuff with all my sales, and depend solely on word of mouth.

    The market speaks.

    Thanks to Mark and everyone else for the valuable input.

    Cheers

    Comment by Roger Wasson -

  90. Thought you all would be interested in this article about a Clickbot network that had 50K computers clicking away on PPC sites, much like Mark suggested.
    http://www.pandasoftware.com/about_panda/press_room/Panda+Software+and+RSA+Security+dismantle+a+new+online+fraud.htm

    Comment by Sean Jackson -

  91. I am so sick of moron people who constantly try to correct people when they say “hackers are bad” or something. Frist of all technically hackers can be considered bad.

    Here is the definition of “Hacker” according to the American Heritage® Dictionary:
    hack·er 1 (hkr) KEY

    NOUN:
    Informal
    1.One who is proficient at using or programming a computer; a computer buff.
    2.One who uses programming skills to gain illegal access to a computer network or file.
    3.One who enthusiastically pursues a game or sport: a weekend tennis hacker.

    Yeah, take a good look at number two.

    And, secondly it is just a name, who cares what it is called, make up a new name for “eithical hacking” if your so frikin concerned about it.

    Comment by MJW -

  92. I am so sick of moron people who constantly try to correct people when they say “hackers are bad” or something. Frist of all technically hackers can be considered bad.

    Here is the definition of “Hacker” according to the American Heritage® Dictionary:
    hack·er 1 (hkr) KEY

    NOUN:
    Informal
    1.One who is proficient at using or programming a computer; a computer buff.
    2.One who uses programming skills to gain illegal access to a computer network or file.
    3.One who enthusiastically pursues a game or sport: a weekend tennis hacker.

    Yeah, take a good look at number two.

    And, secondly it is just a name, who cares what it is called, make up a new name for “eithical hacking” if your so frikin concerned about it.

    Comment by MJW -

  93. I forgot to add, as an aside, IP tracking doesn’t stop the botnets either. They are well distributed so as long as the zombie master isn’t greedy and/or keeps the herd small- it’s absolute child’s play for black hats.

    Comment by Wayne Porter -

  94. Mark,

    Clickfraud is for sure huge. We have documented cases on our blog.spywareguide.com site and hopefully this week we hope to pull the curtains back on something astounding- outlandish even. They may have anti-fraud departments but we know from experience they don’t catch the sophisticated stuff- only the dumb fraudsters.

    But for sure we are seeing enterprising botnets completely hammer away at CPC deal structures. Now the authorities don’t care about splogs, but they do care about the botnet menace. It’s the new wave.

    – Wayne Porter

    Comment by Wayne Porter -

  95. I learn something every day, and today I learned that Hurricanes don’t actually do any damage! Why? Because – and it’s perfectly true – the market (insurance, real estate, Medical plans) corrects for Hurricanes! Which indeed it does (and frequently these days.)

    “Corrections” here just means “copes to the extent possible.” Fewer ad revenues = less web content put up = more demand than supply of good places to put your ads = damage, damage, damage.

    Remember that a stock market “correction” = a sharp fall in value, as bad news sinks in.

    That having been said, the principles of statistical quality control apply to click fraud. It’s tougher to pull off than you might suppose. Doesn’t mean it doesn’t happen, but it’s unlikely the sky is falling, either.

    Comment by Ummmm -

  96. I think the problem has to do more with people clicking ads on their own site and/or on google than it does with splogs sites being built for adsense revenue.

    Some of those Splogs tend to convert well (for the advertiser) if they happen to have good placement on search engines like MSN or even Yahoo.

    Usually when people bid on smaller PPC engines to advertise high paying google adwords they bid on related keywords meaning the traffic is actually looking for what the advertiser is trying to sell.

    If you bid on “YoBaby” at 10c and the advertise for high paying keywords like “Student Loan Consolidation” with Google Adsense your CTR is going to be very low anyway. Nowhere near 10 Percent.

    In the end I think click fraud is overblown. Google has the top clickfraud prevention system on the net.

    The truth is that no one ever has a bad Adwords campaign because of clickfraud. The real reason why people lose so much money on google adwords is because the competition pushes the price up too high and people don’t know what the heck they are doing.

    Comment by youngsmeagol -

  97. Mark –

    I have a relatively simple algorithm that can stop clickfraud in its tracks. I have not patented it (a little busy here with a different startup). But if you’re serious about the importance of clickfraud, I’d be happy to discuss under an nda.

    This is not bs – I’ve been a fan of your writing for years (and you can easily fund a good idea).

    Contact me if interested (my phone’s on the company website),
    Mike

    Comment by Mike -

  98. Google’s empire will come crashing down around it if they don’t clean this problem up — or find a new niche to exploit outside the advertiser world.

    I’ve already ditched all my advertiser accounts there because the ROI was abysmal. I was basically writing donations to Googles money pit.

    Comment by garraeth -

  99. to “Free Online dating” – clicks are legitimate if they are not fradulent, adsense software is supposed to determine that.

    – Mike

    Comment by Find in Forums -

  100. I recently downloaded a file with malware and have been spending the past 1-2 weeks battling it. The bottom line is, it has been using my explorer.exe program (ie, the Desktop) to serve pop-up ads, and then after I managed to block those, it carved a space on my Desktop to serve up more ads. After trying a myriad of anti-spy/virus, serious props to Prevx1 for wiping out the ads, although I still haven’t found the cure. My exploited Desktop still tries to access a bunch of seemingly random IP addresses, but I’m able to block the attempts. When I look up these IPs with my browser, they are all advertising sites or companies that might be advertising online.

    Then as an avid reader of blogmaverick, I remembered this post, and it finally dawned on me. Maybe my computer has been exploited for click fraud.

    Then I remembered how my little 13 year-old cousin’s computer had been attacked by pop-ups. Oh yeah, and my brother-in-law’s has some too. Wouldn’t be surprised if their computers are accessing even more IP addrs in the background either. How many of you know someone whose computer has this type of problem?

    So anyways, here are my points:

    1. I now have first-hand exp. that suggests click fraud is huge, and hello people, it is because of the automated ad/spy/malware, not human clicks.

    2. Time for a class-action lawsuit somewhere on these shady outfits that distribute malware or other forms of unwanted ads or ad clicks.

    3. Time for the government to get involved. Not only is click thru defrauding advertisers, but now it’s costing me and my business time and money too. All it takes is a few good engineers to trace the companies behind this crap.

    Mark, whatever you can do to educate the public on click fraud is greatly appreciated. Sorry for the long post.

    Comment by onetwu -

  101. I’d guess that ads are false if you see a low number of visits to a page but a high number of clicks on that page. For example, if you have 3 visitors and 11 clicks. That would seem fishy.

    Comment by Become a consultant >> Andrea -

  102. How do you tell if the clicks are legitimate, did they have a real genuine interest in the advertisement? Or was it false? It’s not so easy to tell?

    Comment by Free Online dating -

  103. If you use Adwords only allow them to be shown on Google to people conducting an actual search. Do not allow your Adwords ads to be shown on other people’s websites (i.e., through the content network). That’s how you lose money to fraud artists.

    Lesson learned the hard way.

    Comment by Cashflow Business -

  104. Adam,

    If, for example, someone creates an AdSense site and then clicks on its ads, there is no middleman. In fact, the revenue is shared between Google and the AdSense site owner (unless the site owner is caught).

    Comment by CPCcurmudgeon -

  105. This is a huge problem, I don’t think many people who are really smart enough to expliot it on a massive level, I mean if you were a genius you would write a program that builds websites, I believe there are programs already out there that write splogs. – Any wayz you would use the invetory tool and the sandbox simulator given by overture and google, then find your target words, build 1,000 landing pages, then build a program to work with some of the smaller ppc search engines to buy up the keywords for 10% the selling price of your landing page. — thousands of sites, 50-100,000 keywords, producing $200-800 a day.

    – You say “A program can’t build a website” … heh your so wrong with the AJAX, and scraping technology that a lamer can get their hands on these days – we should all be a little up tight with PPC, – espcially common keywords – like t shirt, web site, anything that is common is a target –

    Comment by Richard Bowles -

  106. The real issue is the fact that PayPer(PP) Impression and PayPer(PP) Click are bad methods. The latest forms of advertising options revolve around “actions”; PP Email, PP IM, PP Call, PP Sell are all better options as they have more tangible aspects, can easily be identified as fraud, and matter more to an advertiser.

    The issue is that Google et al hate the PP Action models (PPA). Why? Because of the numbers. Yes they can charge more for a PPA but the occurrence of the events are significantly less hence the cost per event must be more; and in some cases drastically more. Such a huge increase would scare away most small advertisers who “think” that they can “cheaply” do a PPC or PPI campaign.

    As with all things on the web, it is about options. The real issue is why have the majors not included all of the PP options? Why do other online sites still require you to deal with a sales rep as opposed to self-placement?

    Until every advertising based site adopts a mentality of providing advertisers with every option through a self-placed network, then the problems with the PP Click will still be a topic of conversation…as opposed to a small part of the overall online ad universe.

    Comment by Sean Jackson -

  107. Fascinating subject – can we next expect large scale factories of pc’s clicking away through proxies ?
    I’ve heard rumours of such outfits in places like India and Hong Kong but has anyone actually come across them – or is it just an Internet myth ?
    Keith

    Comment by Keith Jones -

  108. I’ve been using adwords for a few months now and I see better results from search only, without the contextual ads on all the adsense scrapers. But it’s also known that sometimes adsense sites can bring better, more targetted traffic because people find them through search engines and then click the ads since they are interested in it, without knowing they are ads etc..

    There’re quite a lot of people complaining lately that adsense bans their accounts for “click fraud” while they didn’t do it, which is quite strange also, but indeed I agree click fraud is most likely a more serious problem than google wants us to think.

    – Mike

    Comment by Mike @ hyip -

  109. I have a little website servicing drivers in my home state. I used AdWords and had very little success. Too often having to bid up on keywords etc etc. Try ADster.com for an appealing alternative to the constant bidding and keyword nightmare. Its the way of the future. Real advertising for real cost on real sites.

    Comment by Steve -

  110. I work at an insurance and financial services company that has been a major Google/Yahoo PPC spender since the beginning and clickfraud is a real issue. We have seen fraud spike on certain terms over the years and while it is clear to us, the search engines are not always so responsive to the situation.

    The issue is that Yahoo/Google etc make money when they allow bad partners into their network who send a lot of clicks. We watch the clicks realtime everyday and analyze the logs on the backend and even we have a difficult time convincing them to kick out bad partners in their network and we spend millions every year with them. They have gotten better in many respects, but it is still there.

    Eventually the search engines will have to clean up their marketplace for it to truly mature and grow. You wouldn’t go to the grocery store and buy a dozen eggs and expect a few to be rotten each time — so why should we expect that there will always be a good deal of rotten clicks? If what Google/Yahoo etc sells is quality clicks, then they need to do more working on that quality angle with their partners.

    Michael @ SEOG

    Comment by Michael @ SEOG -

  111. Keyword Arbitrage.

    It’s insane how these people are earning (scamming) income. Whatever happened to coming up with something useful, and making money off of it? Instead, people try to find the easiest way to earn (scam) money from people (us) that don’t know any better.

    People anymore hate to think, I think that’s what it boils down to. They think it takes too much energy to actually devise a business plan, market it, and turn it into a profitable vehicle. Instead, it’s: “What’s the easiest way to scam people to make a quick buck?”

    I agree with what you’re saying, and just wanted to let you know. I know it’s always cool to hear that people are actually reading, and have emotion towards what you’re writing.

    Thanks for taking the time,

    – Joe

    Comment by Joe Strailey -

  112. Yup… Click Sentinel went free. But not for reasons you might think. The way that click fraud is current being fought is all wrong. To go head to head with these guys is pissing in the wind as far as I am concerned.

    We need a combination of open analytics, open relationships, education and community power if we are going to stop paying for junk traffic. My click fraud manifesto talks more about this here:

    http://www.clicksentinel.com/manifesto

    (Ash (see a few posts up): Our software runs on your own server so your data is your own.)

    Comment by Jay Stockwell -

  113. I think part of the problem is that Google’s search results are often flawed (in the free results). On my blog if the individual words somebody searched on in Google are in two completely different posts, my blog still comes up as a search result. Then I get visits from people that just click in and out because they don’t find what they want. I think a good idea would be to have the search engine look a the nearness to each other of the individual words. This would increase search relevance and it might even reduce the games people play with search terms.

    Comment by UH2L -

  114. How is this (Click Fraud) any different than the multitude of other arbitrage opportunities in the marketplace today? Take for example ticket resalers (scalpers). Isn’t the principal the same? The end result (in both cases) is that the consumer (advertisers with click fraud and attendees with scalpers) pays more for the good/service. The orginator was willing to sell the good/service for a particular price, and yet, with absolutely no added value, a middle man receives an inordinate profit.

    I think the other end result is that the orginal seller, be it the search engine or the performer, is left to wonder if the good was worth the final price it was bought for. If BuyMyGreatGoods.com is willing to pay $1/click, why shouldn’t Google be able to capitalize on that $1, instead of receiving $0.10 from a middle man, that in turn receives the $1. The same holds true for scalpers (and I’m sure this is close to your heart). If the market value of a ticket is $100, then why can’t the performer sell the ticket for $100, instead of a middle man making a $50 profit for the ticket.

    That all said, thanks to the scalpers/brokers for stealing all the tickets to the finals games!🙂 I couldn’t get a ticket from the Mavs at 10:00:15 AM this morning, but there is no shortage of tickets on sites like StubHub.com, only for over $300. Each.

    Comment by Adam W. -

  115. I watch this click fraud thing with dismay. I noticed the other day that Click Sentinel went open source not long after Visitlab came off open source for lack of interest from the open source community. Both are click fraud detection services and the latter has been free for a long time – http://www.visitlab.com/.

    My observation of advertisers is that they would rather deal with the uncertainty of click fraud than trust their data to a click fraud detection service. Weird.

    Comment by Ash Nallawalla -

  116. OK Mark, I guess this is round 2 of the Click Fraud debate. I just wrote another blog post in response to yours. See why I think Click Fraud is NOT a big problem. http://dondodge.typepad.com/the_next_big_thing/2006/06/mark_cuban_vs_d.html

    Here are just two points from my bog post to consider; Google has incentive to stop click fraud. A common “logical” argument of the click fraud alarmists is that Google has no incentive to stop click fraud. Well, in fact they do. I just explained the incentive in my previous point. Click fraud will cause the price per click to drop, which will lower Google’s revenue. Google wants higher prices for quality clicks, so they have every incentive to stop click fraud and keep prices higher.

    Greed always exposes click fraudsters. Mark Cuban makes logical arguments about how click fraud can be done. I agree it can be done without detection on a small scale. But, greed causes the bad guys to crank up the frequency, which causes them to be caught by the detection algorithms. Google’s algorithms monitor everything, and can detect abnormal traffic or patterns that are likely click fraud. There are lots of stories about advertisers being banned from Google due to suspected click fraud. Google, and other CPC ad networks, take click fraud very seriously and detect most of it before it ever gets billed to their advertisers.

    BTW, congratulations to Mark and the Mavericks on winning the Western Conference and going to its first ever NBA Finals. Well deserved!

    Don Dodge

    Comment by Don Dodge -

  117. Google screwed me over with apparent click fraud, but I guess I learned my lesson: Don’t click on your own ads even if you actually want to visit the site. I guess the sponsors get one less customer.

    Congrats on the trip to the Finals with the Mavericks. Check out Steve Nash’s video blog. I guess he got too cocky:

    http://www.youtube.com/watch?v=d7mgUsZQ1eE

    Comment by Brian Laesch -

  118. Nice opinions, but let’s let the experts work.

    Here’s how you stop Google click fraud.
    http://www.revenews.com/davidandrews/2006/03/how_to_solve_googles_click_fra.html

    And here’s the financial analysis regarding it.
    http://www.revenews.com/davidandrews/2006/02/potential_financial_implicatio.html

    And here’s an entire case study on it.
    http://www.revenews.com/davidandrews/2006/02/google_click_fraud_case_study.html

    Comment by Jim Kukral -

  119. Mark: Okay…so do everyone a big favor and invest in finding a security solution to this problem…afterall, we won’t be LESS dependant upon technology as time rolls by…the internet clearly has moved much faster than security technology necessary to secure it. By the way…WAY TO GO MAVS!! I am so proud!!

    Comment by Dusty Pierce -

  120. Mark: Okay…so do everyone a big favor and invest in finding a security solution to this problem…afterall, we won’t be LESS dependant upon technology as time rolls by…the internet clearly has moved much faster than security technology necessary to secure it. By the way…WAY TO GO MAVS!! I am so proud!!

    Comment by Dusty Pierce -

  121. I dunno…I think it’s a huge problem for sure, but I think the big outfits like Google, MSN, Yahoo, etc. will eventually develop the tracking and applications needed to nearly wipe out the fraudsters. I know many will disagree, but here is why:

    The “bad guys” (not quite redundant yet)are not pooling their resources like Google and MSN can.

    This whole gig is just TOO good and the Google’s of the internet have TOO much to lose if they don’t damage click frauders in a significant way.

    My two cents anyway. I a bright future for these models of business.

    – Kenny

    Comment by Kenny Allman -

  122. I get a 8 to 1 return on my Google Adwords investment, so I got nothing but love for
    the fella’s.

    I hear what your saying, but damn, hard to
    argue with 8 to 1 ROI.

    Comment by Jason "Profit" Moffatt -

  123. WOW! What a rush to see the MAVS win in Phoenix tonight! By some divine intervention, I was suppose to now live in Phoenix so that I could see the MAVS make it to the FINALS— I HAVE BEEN TALKING SMACK ABOUT THIS FOR YEARS!!!
    Thank you for investing in and committing your life to the things you believe in and for continually questioning the ‘processes’ along the way. You are the “peoples” owner! MAVS IN 5, maybe 6?

    Comment by Lisa Willard -

  124. Ditto

    Comment by Andrew Taylor -

  125. I’m just thrilled to see a War Games reference, Go Mavs!!!

    Comment by Tim -

  126. Miami May have Shak and The Heat, but Dallas has Avery, Dirk and the Gang and the MAVS ARE ON FIRE !!!. Never knew Cubes could be speechless. When they Become Champs in 6, Mr. Cubes will be “singing his song”. Coach, you’re team not only stuck together, but they are “SUPER-GLUED”. Congratulations from the Bugger Bear and all your fans in Corsicana. We have MAVS FEVER !!!!!

    Comment by Ann Massey -

  127. The Mavs just won. Life is great!!

    Comment by Scott -

  128. FWIW, I have argued about the seriousness of click fraud for many years; before the dotcom bubble, even. IMO, the root of the problem is the way that ads are charged for. The current architecture and protocols of the Internet make it far too easy to manufacture clicks, impressions, actions, or any other discrete event (except sales). If the SEs/ad networks would switch to a fixed fee model, these discrete event fraud schemes would go away. (Pay-per-sale would also work, but the SEs and ad networks would make much less money than with fixed fees, because they could only charge in cases where a sale could be reliably linked to a click on an ad.)

    I have always been surprised that the engineers at Google did not put stronger measures in place to limit the amount of click fraud that could be perpetrated. Smart pricing, aggressive shutdowns of accounts with disputed clicks, etc. should have already been implemented when AdWords and AdSense were launched. It’s not as if the problem of fraudulent discrete events was unknown; it is well understood among Internet protocol engineers and researchers dating back to ARPAnet days.

    I hope that during the US Congressional investigations into click fraud, these issues are brought to light.

    I agree with what’s been written about dumb money. I think that’s mostly what’s been keeping PPC advertising afloat. People claim better ROI, etc. True, for now. Traditional media will be forced to aggressively slash prices to keep from continually losing revenue, and then we shall see how the ROI of fraud-ridden PPC stands up to competitively market-priced traditional media advertising.

    Comment by CPCcurmudgeon -

  129. “A lot of advertisers still get top return on investment through PPC campaigns. If click fraud is rampant, what does that say about traditional media?”

    That it’s overpriced.

    Comment by CPCcurmudgeon -

  130. I agree, but just like with spammers as the problem gets worse the solutions get better. E-mail spam filters have become extremely accurate (while technically very simple). Google’s getting better every day at blocking content spam. Click fraud will be the same. Although click fraud is a unique and difficult problem, so I do have some concerns. But with a bunch of PhDs working on it I’m sure some interesting solutions will appear.

    Comment by Drugs Town -

  131. If I was still the unethical teenager I used to be, clickfraud would probably be my only source of income lol.

    Comment by James Vaughn -

  132. nice war games reference! check out the url. 😉

    Comment by James Vaughn -

  133. Mark:

    It’s worse than you think. I have a financial advisory site, for which I paid for clicks. In that highly competitive space, the terms with any search volume at all cost anywhere from $1 – $5 or more. Because of this, it attracts the bad elements.

    After a few weeks, I noticed that the conversion rate awful (requiring about 12x more visits than other forms of advertising). I installed a little java popup on my landing page. If a visitor was on the site long enough for the site to load, I would register at least one other page view because of this little applet. What I found out was that an astounding 86 percent of my clicks were not on my site long enough for the page to load, which takes about 1 second.

    The proof is incontrovertible. There is no way that traffic was real, human eyeballs.

    Lippard got it right a few posts back. There are so many bot-nets created to defraud PPC advertisers that it is not a useful medium for me. Further, it’s not much better if you are paying on a cost-per-thousand basis. It’s even easier to defraud advertisers that way.

    There is such a massive bubble in internet ad pricing now that very large companies, including Yahoo, Google, MSN, etc. depend on bad guys inflating the prices. Solving the problem would cause ad prices to tumble in a bad way. So, they are only paying lip service to fighting the problem. Unfortunately for many, they have gotten away with it. Google has created $100 billion in market cap, based largely on the clicks of criminals and pornographers.

    Comment by Mark Brandon -

  134. I’m responsible for search ads for a big corporation; as a test, I create sites and blogs to click on my own ads to see if the Google can find the fraud and after a few weeks they do; not sure how they do it, but they stop my account before I had the chance to get the first check, and they give my company a refund for the clicks. From my point of view, I can track the real clicks and we are very happy with the ROI.

    Big Mavs fan,

    Mavericks@gmail.com

    Comment by mavericks@gmail.com -

  135. Ok hang on, personal affronts are not only not needed they are counter productive. If we truly want a sharing of ideas, thoughts and so forth, name calling kills that process.

    *I* for one like I said am steering away from PPC campaigns into more controlled environments, advertising on know sites, and so forth. Is anyone else in the “procure seo for a client” world doing this as well? Or am I simply nuts?

    Comment by Pam Ditto -

Comments are closed.