Eric Edelstein

The report by Fair Isaac which has sparked debate in the Search Marketing industry yet again, claims that click fraud on the major search engines such as google and yahoo is around the 10 to 15 percent level. This far exceeds google’s claims that their filters and engineers have cut down click fraud to under half a percent.

If a company is buying clicks for branding or only buying clicks and not tracking conversions, then click fraud influences them directly.

However, many smart company’s will be monitoring the effectiveness of the clicks. If the company is selling a product, then they can measure the CPA - the cost per acquisition. If the company is generating leads, then they can measure the CPL - the cost per lead. And even if they are simply running a competition, building up a database, or looking for postings on their forums or message boards, it can be measured.

And all measured traffic surely tries to factor in the fact that there is an element of fraudulent traffic, so that it still makes sense for the company buying the traffic. The company’s will be interested in the overall return on the traffic, and if they are highly advanced on Internet Marketing, they’ll also be tracking the return on each keyword.

So they are probably paying less per click, in order to achieve their objective ROI due to click fraud costs increasing the cpa or cpl. Thus click fraud not only costs a company money - it also results in them paying less per click.

So the major engines have a trade-off - receive click fraud revenue (they refund the small amount they pick up, but according to a number of reports including Fair Isaacs these amounts are highly understated), or sort it out, and this should result in some of their big advertisers increasing their CPC bids as there acquisition costs decrease.

But if the reports of the high level of click fraud amounts at the current time are correct, then the major search engines either don’t know how to stop the click fraud (which I hope is the case) or they’re simply turning a blind eye.