Interactive Ad Bureau Issues PPC Guidelines

New guideline issued today by the Interactive Advertising Bureau (IAB) are aimed at reconciling what constitutes a legitimate click in terms of online pay-per-click campaigns, in which advertisers pay publishers for each time a user clicks on an ad.

To an Internet user, a click is a simple action, but for online advertisers who pay for them, accurately counting those clicks is a complex task. In the past, advertisers have argued that often they pay for fraudulent clicks, usually conducted by malware programs, though publisher sites counter that they have steps in place to prevent marketers from paying for bogus clicks. Google was sued over click fraud in 2006 and agreed to pay an online advertisers $60 million, though it was in online ad credits and not cash.

Currently, Google and other search engines generally credit advertisers’ accounts for click frauds they filter out before sending advertisers bills, making it a passive, self-regulation.

The IAB set out to change that today by issuing its Click Measurement Guidelines, which establish parameters for the accurate buying and selling of cost-per-click advertising.

The guidelines, agreed upon by key industry members including Google, Yahoo and Microsoft, provide a framework for identifying and discarding invalid or fraudulent clicks, helping ensure that only legitimate clicks are counted, according to the IAB.

Highlights of the new guidelines include: Defining the technical life-cycle of a click; including provisions for identifying invalid or fraudulent clicks; established standard terms that will help streamline the buying and selling of click-based media; and increased transparency and consistency in click measurements.

“The fact that we’ve obtained agreement within the online industry on the precise definition and measurement of a click and a procedure for identifying and eliminating fraudulent clicks is a huge win for the industry,” said Joe Laszlo, research director of the IAB, in a statement. “These guidelines help assure marketers that the clicks they are paying for are generated by real people with a real interest in the product or service being advertised.”

The guidelines are the latest addition to the IAB’s ongoing efforts to harmonize interactive measurement. They complement IAB guidelines for general ad impressions, digital video commercials and audience reach measurement.

Click Forensics, a click-fraud tracking and oversight firm, has called for industry click fraud standards since 2006 and President Tom Cuthbert says the release of these guidelines is a historic step toward that goal.

“It’s really the first time in the PPC industry that we’ve had any type of standards or definitions, and what’s exciting is that it provides a foundation to build on over time to make online advertising more effective for everybody,” Cuthbert told

He said though the guidelines are a work in progress, for now at least, everyone can operate with the same play book. “Everyone can play by the same rules. For e-tailers, the short-term immediate benefit is that you can ask if who you’re advertising with is in compliance with these guidelines, it gives you a framework to go on for what’s involved in the deal you make,” said Cuthbert.

He added that over time the guidelines will be amended based on feedback from the online ad industry and advertisers. “Our hope is that we continue to adopt standards with the goal of advertisers getting what they pay for.”

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