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Google-Yahoo Defend Themselves Against Click Fraud Estimates

A debate over the growth of click fraud rates between advertisers and online ad networks has both sides accusing each other of a lack of transparency and bad math. The battle is detailed in a long story by InfoWorld. Research from Click Forensics, a firm that provides marketers with analysis of online traffic, says that the average click-fraud rate for online ads in Q2 was 15.8 percent. That represents a 14.1 percent increase in click fraud over the same period last year and a 14.8 percent rise from Q107.

The company’s report also says that the fraud rate within large pay-per-click networks, such as Google and Yahoo, accounted for 25.6 percent of all fraudulent traffic in Q2 – a 21.9 percent increase over Q206 and a 19.2 percent jump in phony hits over the preceding quarter. (More details in Click Forensics’ release)

Yahoo defended itself against the Click Forensics report by saying that its advertisers have not been billed for 12- to 15 percent of the clicks on its network due to fraud. Google, meanwhile, has called the report’s findings into question, denouncing the research as fear-mongering and has accused Click Forensics of inflating the numbers to garner more business from advertisers. Primarily, Google said that the report included fraudulent clicks that were already identified by Google and therefore, was never charged to advertisers. (There’s been a lot of back and forth between Google and Click Forensics on this. Shuman Ghosemajumder, business product manager for Trust & Safety at Google, has a series of posts on his personal blog casting doubt on Click Forensics data, methods and intentions starting back in January here. Tom Cuthbert, Click Forensics’ president and CEO, answers back on the company’s official blog here.)

Neither side has a lock on the truth, notes Ben Edelman, an assistant professor at Harvard Law School who has studied click fraud over the past few years. The key to solving the dilemma is greater transparency from all sides, since neither the search networks nor their advertisers have been open about how about the data on user behavior they retain. He suggests that Yahoo and Google establish message boards that will allow advertisers to share grievances about the systems out in the open. Google says it would consider such an idea, but has no plans to implement it any time soon.

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