A new survey by marketing research firm Outsell Inc. puts a dollar figure on the amount that click fraud is costing the search marketing industry: about $800 million in 2005.
But beyond direct losses from bogus clicks, fraud led 27% of the advertisers polled for the survey to reduce or eliminate their search marketing spending, Outsell reported. As a result, the true price of fraud in pay-per-click campaigns was about $1.3 billion last year, including both fraud costs and lost ad outlays.
Another 10% of advertisers said they have plans to cut back on pay-per-click spending this year out of concern about fraudulent clicks.
“Google, Yahoo! and MSN are stonewalling on click fraud, to their own and others’ detriment,” said Chuck Richard, Outsell vice president said in releasing the report.
The study, which polled 407 advertisers responsible about $1 billion in ad spending last year, reported that respondents believed 14.6% of their search-ad clicks were bogus. Three-quarters of those polled said they had been victimized by click fraud at least once.
