Industry Click Fraud Rate Jumps Past 15 Percent in Second Quarter 2007

Botnet Traffic, Parked Domains and Made-for-Ad Sites Cited as Growing Click Fraud Sources

Click Fraud Rate for Content Networks Hits 25.6 Percent

AUSTIN, Texas--(BUSINESS WIRE)--Click Forensics™, Inc. today released industry pay-per-click (PPC) fraud figures for the second quarter 2007 from the search advertising industry’s leading independent click fraud reporting service – the Click Fraud Index™ (www.ClickFraudIndex.com).

“Our clients are well aware that botnet activity is on the rise and that botnets are being used for a variety of online fraud activities, including click fraud.”

Now in its second year, the Click Fraud Index monitors and reports on data gathered from the Click Fraud Network™, which more than 4,000 online advertisers and agencies have joined. The Click Fraud Network provides statistically significant industry PPC data collected from online advertising campaigns for both large and small companies. Key findings from data reported for Q2 2007 include:

• The overall industry average click fraud rate was 15.8 percent for Q2 2007. This is an increase from 14.1 percent for the same quarter in 2006 and 14.8 percent for Q1 2007.
• The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 25.6 percent. That’s up from 21.9 percent for Q1 2007 and 19.2 percent for Q4 of 2006.
• Traffic from botnets doubled from Q1 to Q2 2007 and contributed significantly to the increase in click fraud rates.
• In Q2 2007, the greatest percentage of click fraud originating from countries outside North America came from France (5.1 percent), China (3.2 percent) and Australia (3 percent).

“We’re not surprised to see the industry average click fraud rate climb this quarter as a result of botnet activity,” said Robert Hansen, CEO of SecTheory and one of the industry’s leading experts in online security threats. “Our clients are well aware that botnet activity is on the rise and that botnets are being used for a variety of online fraud activities, including click fraud.”

The FBI recently reported that botnets – which are used to facilitate crimes, such as spam, identity theft, denial of service attacks, phishing, spyware distribution and now click fraud – have infiltrated more than 1 million U.S. computers. Their sophistication and growing numbers are making it harder for search engines to identify click fraud originating from these sources – especially when they lack the crucial data needed from the advertiser web sites.

“Click fraud has become the new spam and it’s clearly a problem that is getting worse, not better,” said Tom Cuthbert, president and CEO of Click Forensics, Inc. “A significant percentage of today’s click fraud traffic can be attributed to two growing areas of concern for search advertisers – traffic that comes from botnets and from parked domains or made-for-ad sites. Advertisers running campaigns on content networks are especially vulnerable as they are increasingly targets of this growing pool of savvy fraudsters.”

The Click Fraud Index publishes data collected from the Click Fraud Network (www.ClickFraudNetwork.com), the industry’s first independent third-party click fraud detection service dedicated to helping companies more accurately monitor their online advertising campaigns for pay-per-click fraud. Click fraud data is tracked and published on a quarterly basis for specific search providers, industries and trends. The service is unique in that it monitors online campaigns for click fraud by correlating data collected from search provider campaigns and the advertisers’ own web sites – providing the industry’s most accurate view of click fraud to date.

About Click Forensics, Inc.

Click Forensics, Inc. is the leading provider of third-party technology and services that help online advertisers, agencies and search providers to better identify pay-per-click fraud. The company runs the top independent click fraud detection service in the industry, the Click Fraud Network (www.ClickFraudNetwork.com), which monitors online advertising campaigns for click fraud free of charge. Click Forensics also provides an enterprise-class solution to help advertisers with campaigns of 100,000 clicks or more per month to track click fraud. More information on Click Forensics and its offerings is available at www.ClickForensics.com.

Click Forensics, Click Fraud Index and Click Fraud Network are trademarks of Click Forensics, Inc. All other company and product names mentioned are used only for identification and may be trademarks or registered trademarks of their respective companies.