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.
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