Click Fraud Concerns Emphasize the Need for Pay-Per-Conversion
Today's Washington Post had a front-page article entitled "'Click Fraud' Threatens Foundation of Web Ads." It's a good overview of pay-per-click (PPC) advertising and the problems challenging the model. Some of the more interesting facts and stats mentioned in the article:
- Google and Yahoo together handle more than 70% of all web searches in the U.S.
- PPC ads generated $5 billion last year, which is about 40% of the Internet advertising market.
- The PPC model is only about four years old.
- The Yankee Group research firm estimates that 10% of clicks on text ads are fraudulent. Google claims it's less, while others estimate it to be as high as 30%.
- Google employs "about three dozen" people who monitor click fraud, 20 of whom respond to click fraud complaints from advertisers.
- 39% of Google's third quarter revenue ($1.04 billion) came from its affiliate network (text ads placed on other sites).
- New York ad agency Carat Fusion says that "sixty percent of new customers come through Google."
- This summer, Google, Yahoo, Microsoft Corp., and Ask.com executives agreed to form a click fraud working group to develop industry standards.