Search Companies Team Up Against Click Fraud

isabotage3 writes to tell us that the top three search companies, Google, Microsoft, and Yahoo, have teamed up to create an alliance to combat click fraud. The fact that these three bitter rivals can team up shows just how serious the industry has become about preserving the current online advertising boom that is currently underway. From the article: "Click fraud has attracted an increasing amount of attention amid class-action lawsuits and industry studies asserting advertisers have been collectively overcharged by more than $1 billion for bogus sales leads during the past four years. Google and Yahoo contend that those estimates are gross exaggerations generated by opportunistic lawyers and online advertising consultants hoping to cash in on the anxieties triggered by their calculations."

Re:Odd thing to measure anyhow

[zootm]

The report on the click-fraud investigation around Google [blogspot.com] (PDF, I'm afraid) has a lot of good information regarding this. It goes into the different payment models possible for online advertising, and makes a good case for the usefulness of each of them — as it points out, Pay-Per-Click is a good model for many advertisers provided it works, which is why there's an onus on cracking down on fraud.

If advertisers think that the ads working, they will pay the right price for them — if fraud is prevalent, it reduces demand and makes price (and value) of ads go down. So in a way, the advertisers are determining what the ads are worth to them and paying accordingly, in as practical a way as possible without just letting them name their price after-the-fact ("zero dollars, please!").

I'm reminded of a quote

[Comboman]

The irony is that many of the companies that are uncomfortable with this medium for advertising is that they're perfectly willing to spend millions on TV and print advertising where they can't even reliably track anything.

I'm reminded of a quote: "Half the money I spend on advertising is wasted, and the trouble is I don't know which half." ~ Viscount Leverhulme, Confessions of an Advertising Man (1963)

Re:Odd thing to measure anyhow

[cbrew]

Bruce Schneier has pointed out [schneier.com] that the underlying problem with click fraud is the way that the incentives are set up. If it is in the fraudster's interest to try to spoof the system, this is going to happen, and both fraudsters and would-be fraud-busters are going to spend time and effort on an "arms race" that has no winners. He recommends that Google and co.

Change the rules of the game so that click fraud doesn't matter. That's how to solve a security problem.

and suggests that Google's experiments with cost-per-action [betanews.com] are indicators of how things might go forward.

cf. http://www.schneier.com/essay-119.html [schneier.com] for Schneier's own words

Re: Logging IP Addresses

[Anonymous Coward]

wouldn't they notice if someone got 10, 100,1,000, etc... click throughs from one or a few IP addresses?

Yes, 10,000 clicks from a single IP are easy to catch. The bad guys know that too. They also don't sent the clicks exectly one second apart either. They're not dumb.

You ever hear of malware that installs itself on your computer and waits for remote instructions? One the the things they are used for is as click bots, so that X number of automated clicks come from Y different IP addresses (one of them yours) and the X:Y ratio is low enough to not raise any flags.