Is Pay Per Click PPC Fraud killing advertisers? - By: Jessica Thomson

In a study made by a research organization called 'Outsell' in July, 2006 it was reported that amount of money lost by internet advertisers because of pay per click fraud has reached $1.3 billion. Internet advertisers themselves estimate their loss on this account is about 14.6% of all PPCs made on advertisement and subsequently billed, about $800 million in 2005.
Those organizations that are providing this service did not reveal these figures regarding fraud made in internet marketing business.
Another recent study made by an organization named 'Click Fraud Network' puts the figure at 14%, while those organizations who are involved in providing services to detect such frauds feels the actual figure should be twenty to thirty per cent. But, the organizations which are providing this service feel that the figure is much less.
Of the total $1.3 billion loss mentioned in the study of 'Outsell', actual loss caused by the fraud is $800 million and balance $500 million is caused by reduced spending by the advertisers. In this survey, 27% of the respondents have either reduced or stopped their on-line advertising spending of which 16% have reduced their advertisement spending.
75% of them said they have experienced such fraud and 7% of them have obtained refunds also amounting to $9,507 on the average.
According to a Google representative, they are taking the matter seriously and significant amount of resources are being employed to tackle the problem. They feel that they are handling the problem properly and the extent of the problem is not very large.
Yahoo also feels that the problem is manageable but they are taking the problem very seriously. To tackle this problem, they have even developed a click though protection system.
By using this system, they could identify billons of clicks which they did not bill. These improper clicks were partly caused by click fraud and partly because of improper billing.
They say they are very much concerned about the menace but they are confident that would be able to tackle it properly.
Microsoft acknowledged the existing of such fraud but did not comment any farther.
Yahoo has so far spent $5 million to settle cases of such click frauds while Google is going to pay $90 million to settle lawsuits linked with click fraud.
Experienced people who are involved in this field feel that this problem could be solved if an independent auditor is appointed to check click frauds.
The Search Engine Marketing Professionals Organization is collaborating with Fair Isaacs, an organization involved in checking credit card frauds to find the actual extent of this problem of click fraud.
For online advertisers, this issue of click fraud is definitely a serious matter, but it has not crippled the business and a lot of activity is going on for reducing this fraud as much as possible.

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