January 30, 2007, 12:00 AM

Search marketing click frauds climbed to year’s highest level in Q4

Industrywide click fraud rate was 14.2% in Q4 2006. The click fraud rate for affiliate sites was even higher at 19.2%, the Click Fraud Index shows.

The rate of click fraud in online pay-per-click advertising climbed to the year’s highest level in the last quarter of 2006, but the click fraud rate for affiliate sites was even higher, according to the quarterly Click Fraud Index. The index represents more than 3,000 online advertisers and their agencies that have joined the Click Fraud Network organized by third-party click fraud detection service Click Forensics.

Click fraud occurs in pay-per-click advertising when a web user (or in some cases an automated system) clicks on an ad without having any actual interest in the advertised product, solely to generate a payment for that click to the ad hoster. Some click fraud is now perpetrated by automated programs rather than individuals. The primary reasons for click fraud are a competitor trying to deplete a marketer’s pay-per-click budget or a hosting site trying to enrich itself fraudulently.

In last year’s Q4, the overall industry average click fraud rate was 14.2% versus 13.8% for Q3. The average click fraud rate on pay-per-click ads appearing on affiliate sites was 19.2% for Q4.

“The data confirm what other recent independent investigations have uncovered about click fraud. Click fraud remains a concern for online advertisers and affiliate sites represent a large and growing source of click fraud traffic,” says Tom Cuthbert, president and CEO of Click Forensics.

In other Q4 findings, the data showed that the average click fraud rate for higher-priced search terms remained at 20.9% as it did in Q3. High-priced terms, defined as terms that cost more than $2 per click, make up the largest share of an advertiser’s total pay-per-click spend. The average pay-per-click keyword cost for the top terms across the five biggest search advertising industries–retail, financial services, health & fitness, technology and entertainment–was $3.50 in Q4, compared to $3.92 in Q3.


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