If there is any single axiom of the digital age, it must be this: for every advance, there is a scourge.
E-mail has spam. The Web has pop-up windows and spyware. Even the market infant, Internet telephony, has analysts bracing for an onslaught of what is been called "Spam Over Internet Telephony" (or "spit," of course).
It should come as no surprise, then -- and some might say it is a bit of poetic justice -- that online advertisers are becoming acquainted with their own special plague: click fraud.
The variations are many, but it essentially works like this: Merchants typically pay a fee to the sites that play host to their advertisements whenever those advertisements are clicked by a visitor.
In an ideal world, the visitor, now transported to the advertiser's Web site, hangs out for a spell, examines the wares and eventually makes a purchase.
In click fraud, those clicks that the advertiser is paying for are not coming from potential customers, but from scam artists, automated scripts and even underhanded competitors.
"It's really any click initiated on a cost-per-click ad that is made without there being a possibility of a legitimate site-visit or a transaction to occur," said Jessie Stricchiola, the president of Alchemist Media, a California company that helps advertisers recoup cash lost to the practice. "It's a really serious problem for the advertisers it affects."
It is nearly impossible know precisely how widespread click fraud has become. John Squire, the vice president for product marketing for Coremetrics, which provides consulting and Web analysis for online merchants like Eddie Bauer, OfficeMax and CompUSA, estimated that his company's clients are spending about US$10 million a year on fraudulent clicks. That is, they are spending about US$10 million on consumers that don't exist.
Other companies -- usually ones that are feverishly peddling their own solutions to the problem -- say that as much as 50 percent of cost-per-click advertising dollars are spent on fraudulent clicks.
The practice has been around for years, but it is gaining wider attention as the online advertising market continues to grow rapidly. According to a survey released last month by the Internet Advertising Bureau and PricewaterhouseCoopers, online advertising revenues in the US have been growing steadily over the last two years, and now stand at US$2.4 billion.
And given the advent of affiliate programs from companies like Google and Yahoo, with its Overture Services, the opportunities to engage in click fraud have become even more widely dispersed.
Affiliate arrangements allow third-party Web sites to display context-sensitive advertisements pushed over to them by the larger players.
When visitors click those advertisements, the third-party site gets a share in the revenues.
It didn't take long, then, for shady affiliates to figure out that artificially driving up the click rate on those advertisements could enhance the commission checks that are doled out to them by their patron networks.
The Times of India reported last spring that a growing number of housewives, college students and other people in need of some extra cash were being hired in New Delhi to sit in front of a computer and click on advertisements.
Other rings of phantom clickers have been reported in China, Nigeria and elsewhere.
Perhaps more often, sneaky affiliates will deploy scripts or software that will robotically click the advertisements, mimicking visitors and scooping up revenues.
Most striking of all, perhaps, is the third variety of click fraud, in which overheated merchants click on a competitor's advertisements as a way of devaluing the competitor's campaign and depleting the rival's advertising accounts.
"Sometimes it just makes people feel good to know they're costing their competitors money," Stricchiola said.
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