Click Fraud Hits 35% on some U.S. PPC Networks

Anchor Intelligence, in it’s quarterly traffic report, reports that click-fraud has reached an all-time high in the first quarter of 2010 for affiliate marketers using its services.

Unsurprisingly, the highest click-fraud rates are coming from countries with historically lax controls on internet traffic and PC security. Vietnam has the highest rate of detected click-fraud (mainly through botnets installed on trojaned computers), at 35.4% of all measured clickthroughs.

What is surprising, however, is that click-fraud in the U.S. is running at 35.0%, which represents the lion’s share of all click traffic by volume, followed closely by Australia, Canada and the UK. Click-fraud in the U.S. is predominantly committed by sophisticated organizations usually hired by competitors to increase a company’s PPC advertising costs.

What is most disturbing is that major PPC providers such as Google and Yahoo clearly have the means to identify concerted click-fraud attacks, which have obvious signatures such as automated high-volume traffic from distinct IP ranges, yet they have little incentive to address it, as cracking down on click-fraud just takes money from their pockets. While Google some time ago published an independent report of its fraud-detection techniques,  the conclusion by that researcher was that Google’s effort to filter invalid clicks was “reasonable”, however he adds that the CPC model “is inherently vulnerable to click fraud.”

What to do if you suspect Click Fraud

It’s up to the advertiser to track the clicks and identify fradulent behavior, and then petition the network to adjust the CTR billing. The only way to do this is to monitor your server logs and identify PPC traffic, and then look for patterns in the originating IPs. For websites with high traffic and PPC volume, it can be difficult to separate valid traffic from fraudulent clicks, and even more difficult to “prove” to the network.