Cherry Hill Research  
  Research Library: Click Fraud
 

Last Update: May 5, 2006


CHERRY HILL RESEARCH VIEW:

We believe the "bad click" problem will force search engines and advertisers to modestly increase spending on click-stream auditing efforts. This could have a minor negative impact on search engine profit margins. Despite increasing bad-click activity, however, we believe the problem is manageable and will not cripple the industry.



PUBLISHED CHERRY HILL RESEARCH INTERVIEWS AND OTHER PRIMARY SOURCES:

Tom Cuthbert, president of click-fraud auditing firm Click Forensics, who believes the problem is overstated and can be managed.

Interview: Andrew Goodman, principal of search-engine-marketing firm Page Zero Media, who agrees click fraud is a concern but does not think it is as serious as the media makes it out to be. Other topics include click fraud, search spending trends, local search, Yahoo, Google, and the (poor) outlook for Microsoft AdCenter.

Interview: Ben Edelman, spyware and click-fraud expert, who has done painstaking research into the size and intractability of both problems. Other topics include spyware, Yahoo, Google, and porn ads.

Interview: A sophisticated advertiser convinced click fraud will destroy the pay-per-click business.


SECONDARY SOURCES:

Webinar conducted by click-fraud consultant Jessie Stricchiola, who has consulted for, among others, the plaintiffs in the Arkansas click fraud case. Excellent overview of the click-fraud problem. Stricchiola believes the search engines must establish a uniform definition of click fraud and make it easier for advertisers to submit data.

Click Forensics has introduced a Click Fraud Index designed to monitor suspicious clicks across a panel of hundreds of advertisers. The Index uses a sophisticated methodology that tracks clicks through conversion (or abandonment) and considers such data as IP addresses, geographic location, and multiple visits. The Index currently suggests that 14% of clicks have a high probability of being fraudulent, a number below many other estimates. We have conducted an in-depth interview with Click Forensics CEO Tom Cuthbert (see above).

Mark Cuban has published an interesting exchange about click fraud with Don Dodge, a Microsoft bigwig. Referring to the Click Fraud Index above, Dodge pointed out that 14% was a far cry from the 30%-50% estimates thrown around by click fraud "alarmists" like Mark Cuban and Henry Blodget. For the record, Blodget has always been in the 10%-30% camp, and Cuban disavowed the estimate as well. Cuban also described many types of click fraud that he does not believe are captured in the Click Fraud Index.


ADDITIONAL INFORMATION AND RESOURCES:

Cherry Hill Research maintains a network of industry sources with expertise in this and other disciplines. We are happy arrange one-on-one consultations between clients and sources or perform additional research as requested. For more information, please write to clients@cherryhillresearch.com.





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