Fraudulent clicks can cost retailers plenty in bogus paid search fees

Retailers who use paid search to market their products on the Internet need to guard against click fraud, the practice of clicking on a competitor’s listing to run up the cost, warns Lisa Wehr, president of OneUpWeb, a Suttons Bay, MI-based search engine marketing agency.

“It’s become a cottage industry,” Wehr says. “People in India are getting paid to click on ads. It’s hard to tell how many millions of dollars are lost.” Some companies write software to automate the scam and others simply hire people to sit at a computer and click the listing repeatedly by hand, she says.

“All of the engines will tell you that they have prevention programs in place but the sad reality is that there are several undetectable ways for your competitors to continue the fraud,” a report from OneUpWeb says. “What was designed to help companies attain a guaranteed top listing has become a debacle of competitors trying to put each other out of business.”

A spokesperson for Overture Services Inc., a Pasadena, CA-based search engine company that’s a division of Yahoo Inc., says the company does not share numbers that could indicate how widespread click fraud has become. The company does, however, maintain a team dedicated to “click protection,” the spokesperson says.

OneUpWeb says it can detect and monitor fraudulent clicks for clients by watching for unusual patterns in click activity-like sudden spikes-and by comparing URLs to see if they’re closely related, which also can indicate click fraud.

An SEM agency that can present evidence of click fraud can approach the search engine for a refund, Wehr says. She also notes that watchdog services are springing up to help retailers detect click-through problems.