Google and Overture employ "fraud squads," or teams of people dedicated to fighting click schemes. But at least two marketing executives say such countermeasures are missing fraudulent clicks that are responsible for between 5 percent and 20 percent of advertising fees paid to all search networks.
Overture spokeswoman Jennifer Stephens refutes that estimate, saying that the numbers likely represent acts of fraud that are ultimately caught. She added that Overture filters most fraudulent clicks with the best antifraud system in the industry, which combines technology and human analysis.
"We take this very seriously; it's the foundation of what we do," Stephens said. "If an advertiser has a question about it, we look into all matters."
Cost-per-click advertising comes in many forms, but it essentially lets marketers gain exposure on a Web site and pay only when people click on their ads. Google and Overture let advertisers bid for placement of paid links, which appear when certain keyword searches are conducted on the networks' sites or those of third parties that partner with them. Keyword ads can also be distributed according to the content of partners' sites and displayed on non-search pages. (CNET Networks, which publishes News.com, partners with Google for shared advertising revenue.)
Most advertisers are aware of the click-fraud issue but have not delved into it because of the technical complexities involved. Others are concerned that they could jeopardise their relationships with the powerful search networks if they complain too loudly.
"It is a bigger problem, but folks just don't want to take the time to track it down because it's a complex problem," Coremetrics' Squire said. Given that some of the largest marketers manage up to 1 million keywords in a campaign, he added, the data can be difficult to crunch.
Danny Sullivan, who runs a quarterly search-industry conference, said many advertisers do not raise their concerns with the ad networks because "they're afraid that if they complain, it will hurt their free listings."
Still, more fraud-detection technologies are emerging to help advertisers analyse their campaigns and traffic. Some advertisers and search-engine marketing companies say they are compiling lists of sites that generate a high number of clicks but not sales.
