A Head Above the Clickfraud Tide - Page 2

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A Way Around The Fraud

One company has admitted its click-fraud role, and its CEO says the company is better for it.

At the beginning of 2005, LookSmart CEO Dave Hills realized that the traffic the search provider sent to advertisers wasn't converting.

People clicked on the search ads, but when they reached the site, they failed to buy or perform other desired actions.

"I realized we had problem with the conversion of traffic," Hills said. "Some was just low conversions; others were fraudulent in nature. I told analysts, 'I have a lot of traffic I need to remove from the network.'"

In some cases, LookSmart removed publishers from its advertising network; in others, it worked with the publishers to help them understand how they might be enabling click fraud by affiliates.

"Being open allowed us to move through it really quickly," Hills said. But the process cut that year's revenue in half.

Revenue from clicks isn't the whole story, however.

Hills said that after the weeding process was completed in mid-July, LookSmart's cost per click (CPC) began to climb. By year's end, he said, the overall CPC was up two cents, showing that the traffic LookSmart was sending to advertisers' sites was more valuable to them.

Hill said that the cooperation of advertisers is key to combating click fraud. While some preferred to sit out the cleanup process, he said, others helped by sharing their own traffic and conversion analysis.

"One reason we chose to be so open was I wanted to make sure that both the advertiser and publisher community understood what we were doing," he said.

LookSmart still is in litigation with Lane's Gifts, and Hills wouldn't comment on the suit or Google's settlement.

Comparison shopping search engine Sortprice.com took a different approach to combating click fraud: It ditched the model. Last month it announced a flat-rate model for advertisers.

"Clicking on pay-per-click advertisements with no chance of a conversion produces no revenue and drives up the cost of business among advertisers," said Sortprice.com CEO Doron Simovitch in a statement.

"The goal at the end of the day is to ensure increased traffic and sales and not to make them a target for click fraud."

Click Forensics wants to apply the spam-fighting tactics used by ISPs to the click fraud problem.

The new company, a spin-off of Web analytics vendor Optimal IQ, launched the Clickfraud Network. It hopes to bring together advertisers, agencies and search providers to identify patterns of fraud.

Advertisers can feed the network up to 100,000 clicks and 50 terms at no charge; Click Forensics analyzes the traffic using a variety of attributes and then provides the advertiser with a report scoring the traffic for the likelihood of fraud.

More important, it aggregates the patterns and information to be used in refining its rating engine: The more examples it has, the better it can identify bad clicks. It plans to publish weekly reports on click fraud threat levels.

"If the search providers get through this and are willing to work to develop standards, it will mitigate a lot of concerns going forward," said Click Forensics President Tom Cuthbert.