April 25, 2006, 12:00 AM

Fraudulent clicks equal 13.7% of all clicks, says new index

Online click fraud, broadly defined as repeated clicking on a pay-per-click link with no intention of purchasing anything at the resulting web site, amounts to 13.7% of all clicks, says the new Click Fraud Index from Click Forensics.

Online click fraud, broadly defined as repeated clicking on a pay-per-click link with no intention of purchasing anything at the resulting web site, amounts to 13.7% of all clicks, says the new Click Fraud Index from Click Forensics Inc.

Click fraud occurring at the major search engines, such as Yahoo and Google, which Click Forensics identifies as Tier 1 search engines, accounts for 12.1% of all clicks. Tier 2 engines experiences a 21.3% fraud rate and Tier 3 engines, a 29.8% rate.

Click Forensics says it uses a variety of techniques to investigate and quantify click fraud, including tracing repeated, rapid clicks to a single to IP addresses and observing clickers behavior once they arrive at a site.

Click Forensics reports that the average cost per search term for Q1 was $4.75 for the top key terms across the five biggest search advertising industries: Retail, Financial Services, Health & Fitness, Technology, and Entertainment. It also reports that over 90% of such fraudulent activity originates from within the U.S. and Canada. Outside the U.S., the greatest number of click fraud originates from within China and France.

Click fraud can originate from a number of sources, but most often it is used by pay-per-click engines and affiliates to generate clicks and higher payments and less often by companies seeking to deplete the marketing budgets of competitors.

"One of the most interesting discoveries from the first round of data reported by the Click Fraud Index is the lower-than-expected rate of overall industry click fraud," said Tom Cuthbert, president and CEO of Click Forensics. "People in the industry have previously pegged the click fraud rate at anywhere from 20-35%. However, we`ve found that the level is actually on the lower end of those estimates."

The Click Fraud Index publishes data collected from the Click Fraud Network, an independent click fraud detection service which helps companies monitor their online advertising campaigns for pay-per-click fraud. Click Forensics says clients include some major retailers.

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