Curated by: Luigi Canali De Rossi

Monday, December 6, 2004

Clickbots: Is Click Fraud The Biggest Threat To Independent Publishers' Future?

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According to a CNN news report, George Reyes, Google's Chief Financial Officer (CFO), speaking at an investor conference on December 1 2004, said that the growing abuse of the company's lucrative sponsored ad-search program by 'click fraud' was jeopardizing its business.


"I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model."

Click fraud, however, is not only of serious concern to Google and its shareholders; it has the potential to undermine and even destroy the ambitions of many thousands of independent online publishers, who have only relatively recently recognized and started to adopt a truly innovative way to begin to be rewarded financially for their efforts.

'Click fraud' occurs when individuals, or purpose-built software programs, click on ad links that appear next to search results or articles in order to force advertisers to pay for the clicks. Although the true extent of click fraud appears to be unknown, it is generally recognized that the perpetrators fall into three camps.

1. Organizations which deliberately (either by themselves or through hired third parties, known as 'click farms') click repeatedly on their competitors ads, so that the latter end up with huge ad bills.

2. Individuals who set up bogus or scam sites focused on a specific category, topic, product or service, open up contextual ad accounts with the likes of Google AdSense and then populate the site with whatever reasonably relevant content they can scrape from other online sources. Ad clicks then result from a combination of 1. above and through innocent visitors arriving at the site through search engine results.

3. People who use a combination of 1. and 2. while adding the use of a clickbot. A clickbot is a software program that can simulate the clicking of different ads on any Web page, at any URL, at predetermined, random time intervals, whilst showing a different origin IP address each time. A well-written clickbot can be worth a fortune (Robin Good, who reported this data to me, also mentioned that the amounts of money made by some of these clickbot scammers is so vast, that a few of them are even afraid to go to the bank to cash it!).

Google's CFO is primarily concerned about the ever increasing amount of compensation it is having to pay out to its advertising clients once they discover that all the clicks-throughs they've been getting have not only not been resulting in any new sales but have also been perpetrated by their competitors or by scam sites.

Google AdSense and other contextual advertising programs such as Overture, Kanoodle and Pheedo, offer legitimate small, highly specialized niche publishers the opportunity to place highly relevant ads next to their content on their micro- and blogsites, thereby offering their readers useful and complementary product and service information that they may find useful clicking through to.

If Google and its competitors in this field really begin to suffer significant loss of revenues through click fraud, then the possibility exists that the tremendous opportunities that contextual ads provide to specialist independent publishers may be at risk.

Although it's unlikely that these programs will be dismantled - paid-search advertising generates about 98 percent of Google's revenues and huge demand for cost-per-click advertising doubled its revenues in the first three quarters of 2004 - the relative ease with which publishers can start using and benefiting from these services may get a lot harder.

This would inevitably hinder the ability for niche publishers to grow at the rates we're currently witnessing - and our collective vision of a brave new age of independent news and media production and distribution would, at the very least, be stalled in the short-term.

Some good, however, may come of this.

Currently, advertisers have no choice as to which particular sites their contextual ads appear on. It's a 'pot-luck', 'take-it-or-leave-it' approach.

Advertisers haven't the means to determine whether their ads are appearing on reputable or bogus sites. It's only when they get their bills through and correlate them against improvements (or lack thereof) in sales that they might get suspicious.

However, if Google and its fellow ad agencies were to provide lists of vetted, 'preferred' sites, grouped by quality and editorial subject matter (such as Google 'categories'), advertisers might feel more confident in allowing their ads to be placed there.


Although this won't get rid of the problem of a site's malevolent competitors stealing their AdSense code for click-fest purposes, it will at least be a move in the right direction.

In weeding out inappropriate or bogus sites, the overall size of the ad spend pot for those that are selected to remain becomes much larger - it's a win-win. Advertisers get better targetted sites (higher click-through rates) and publishers get more revenues (higher $ per click).

Whether click fraud is the "biggest threat" to the internet or not remains to be seen.

I'm not sure whether click fraud really ranks as high as spam, phishing, identity theft, viruses, pop-ups, spyware or adware.

Every threat can also be an opportunity, if dealt with appropriately by the powers-that-be.

The current vogue for contextual pay-per-click ads may fade gradually into history, as have all (at one stage) hugely popular internet advertising models, such as banners, pop-ups, pop-unders, pop-up-laters and the like (oh no, they're still with us, aren't they?) and be replaced by something more innovative, less vulnerable to being hacked and more reliable as a marketing system - both for advertisers and independent publishers alike.

Photo credits:
"millepiedi" Andrea Simonato
"flic" Brandon Blinkenberg

Reference: CNN Money [ Read more ]
Readers' Comments    
2006-12-30 18:30:56


With a limited ad budget for adwords all this click fraud needs to be stopped somehow. I think use of anti spyware and adware programs will help slow down the botnets but the people who are most vulnerable to their computer being infected are the computer novices.

2004-12-08 16:09:38

richard aka: k(no)w one

I agree, if these 'bots' or people who create numerous click-throughs, in order to generate money for themselves, are not stopped, we will see some companies actually going broke, paying for advertising that is not paying off. How to stop it and the solutions surrounding 'click-fraud' will at some point also become part of the whole security issue that involves all of the internet. One solution may be to create counter bots that sniff out the fraud, stopping it and possibly even prosecuting the perpetrator(s).
Another solution, which is in part the internet was designed for in the first place, is to create almost two internet's: one for information and one for commercial with search engines that can tell the difference, because as a student myself, I get more commercial site as a result of a search that has so much advertising it has almost no worthwhile information.
As a society, we have become over-marketed to the point of absolute clutter, creating an over-stimulous of marketing noise. We need to decide, are we going to stand for it or will we at some point say, "enough already." which will also help reduce fraud inderectly.
There are certainly no easy answers. We need to deal with this toot-sweet before it creates a serious back-lash.

posted by on Monday, December 6 2004, updated on Tuesday, May 5 2015

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