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Pratap Ravindran

Internet marketers and search entities and their affiliates are a worried lot now because of the return of a menacing fraud that can cost them a lot of money...

THEY thought they had it licked years ago. It turns out that they hadn't...

We're talking click fraud here, which, as it turns out, has an Indian angle to it - something which should give all those who believe that our country is an IT superpower a warm, rosy glow.

The term "click fraud" refers to the practice of using bots (online robots) programmed to roam the Web and click on advertisers' links displayed in search results or of hiring people - usually in India and/or China — at low wages to click on these links, thereby increasing the traffic. While it is impossible to work out the extent of click fraud, some marketing professionals believe that they account for something like 20 per cent of the paid search fees in certain advertising categories.

Click fraud is also used by competing firms to try and bankrupt each other: Thus, Company A may deploy bots or people to click on Company B's ads to mess up its marketing budget and, of course, its attempts to figure out the contours of its market.

To understand click fraud and its near-lethal impact on Internet search marketing, one must be aware that Internet ads which are displayed with keyword searches are now recognised as one of the most effective ways for companies to measure their status vis-à-vis potential clients and, therefore, constitute a huge and rapidly growing industry. According to the research firm eMarketer, US sales from advertiser-paid search results increased by a stunning 175 per cent to $2.5 billion in 2002-2003 and are expected to continue climbing to $3.2 billion this year. Inevitably, the payment per click has gone up from 30 cents in 2002 through 40 cents in 2003 to about 45 cents this year — or even several dollars per click in certain industries like gaming — with advertisers scrambling to get hold of key words that pack punch.

The stakes are very high indeed for Internet marketers and search entities and their affiliates who are a worried lot now because of the return of a fraud which had been very common in the early days of the Internet and which they had thought had been stamped out with various companies claiming success in introducing technological fixes. But they are trying to fight back as best as they can...

Thus, in March this year, an individual called Michael Bradley was nabbed by the California cops and charged with extortion when he allegedly made demands for $150,000 from Google on the basis of the threat that he would make available to the top 100 spammers in the US a software programme that he had put together which would have enabled them to cheat the search giant of millions of dollars. Google pays Web publishers a fee for every click on the ads featured on their sites — and the software Bradley designed would have flooded the Google advertisements with fake clicks, potentially costing the company a whole heap of money. Incidentally, he had also offered his services as a consultant engineer to help Google stop other advertising fraud. Unfortunately for this helpful soul, he was arrested, charged and indicted, his offer to help Google fight fraud notwithstanding.

Google, for its part, did not respond to media queries about the incident at that point because it was locked into the mandatory "quiet period" prior to its initial public offering - but it did say that it had been "the target of individuals and entities using some of the most advanced spam techniques for years" and that "we have applied what we have learned with search to the click fraud problem and employ a dedicated team and proprietary technology to analyse clicks." Further, in a filing with the Securities and Exchange Commission, the company acknowledged the threat to its revenue of which about 95 per cent is from advertising. As the company - much like other search networks - refunds money to advertisers when click fraud is discovered, it stated in its filing that, if "unable to stop this fraudulent activity, these refunds may increase" and that "If we find new evidence of past fraudulent clicks, we may have to issue refunds retroactively of amounts previously paid to our Google Network members."

While Google is using its own people and technology to protect itself, other search companies (and some marketing firms) are compiling lists of sites that account for a large number of clicks but do not generate any sales or are trying out the various fraud-detection technologies that are available in the market. Most of these technologies work by analysing Web traffic logs or surfing behaviour. Thus, by way of example, if a page is turned every two seconds over a sustained length of time, the traffic is red-flagged.

However, these technologies fail when people - as against bots - are used in perpetrating click fraud because the clicks come from different computers in different parts of the world and do not constitute a recognisable pattern. They are not of much value when sheer cussedness is involved either: employees of marketing firms are known to spend some of their working hours on clicking on rivals' ads featured by Google or Yahoo because they know that the other guy is forking out money for each click and that such payments can add up rapidly to wreck a marketing budget.

Picture by Bijoy Ghosh

eworld@thehindu.co.in

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