The Austin, Texas-based click quality monitoring firm released its quarterly Click Fraud Index on Thursday. While overall click fraud inched up by less than 1%, click fraud on the content networks hit 28.1%--about a 3-point increase from the second quarter, and an almost 10-point surge from the end of 2006.

Click Forensics' stats point to worsening traffic quality on the content networks, fueling advertiser fears that buying ads (text, images, video or mobile) on these networks can drag down their return on ad spend (ROAS)--or worse, do harm to their brand by associating it with negative content.

But some search marketers don't think that the Click Forensics stats are a cause for alarm--or a reason for advertisers to shy away from contextual ads.

"I wish I could tell every new advertiser to lose that fear," said John Lee, a search engine consultant at Bloomington, Ind.-based Hanapin Marketing. "Yes, there is click fraud, but there are also tools to combat it. The content networks can be powerful tools for driving traffic, conversions and sales, so it would be silly not to use them."

Amber Benedict, also a Hanapin Marketing search consultant, said that closely tracking ad performance on the content networks is key to fighting click fraud. "You have to watch those campaigns carefully," Benedict said. "The networks are so broad and so many people are exposed to your ads that you can't just use keywords and let them run. You need to use outside analytics and pull reports at least once a week."

Although both Benedict and Lee said that content network click fraud wasn't particularly a problem for their clients, Lee did acknowledge that some verticals were more prone to the issue than others.

"I've noticed more rebates and discounts for clicks with health insurance clients as opposed to some others, but that industry is competitive both on and offline," Lee said. "And anytime that you advertise on content sites outside the U.S., you're opening yourself up to higher instances of click fraud," Lee said. The third-quarter 2007 Click Fraud Index reported that France, China and Germany were the top three international sources of click fraud for U.S. advertisers.

Lee added that while Hanapin Marketing didn't endorse or use the Click Fraud Index as a barometer for market assessment, third-party vendors like Click Forensics were necessary. "For the most part, I believe what Google and Yahoo are telling me about the clicks," Lee said. "But without third-party research firms raising a flag it would give them a reason to not be truthful. These vendors are probably the primary reason that the engines have stepped up the transparency and analytics for their networks over the past year--especially Google in the past six months."

But according to Tom Cuthbert, Click Forensics' CEO, the big engines still aren't doing enough to improve traffic quality on their content networks. "There has been some degree of improvement in the reports that they offer, but the system is still a long way from where it needs to be for advertisers to exclude these sites."

Cuthbert has publicly gone back and forth about the click fraud issue with Google's click fraud czar Shuman Ghosemajumder (in a set of recent Forbes articles), and argues that on a high level, the engines aren't giving a full effort to clean up their networks because their goal is to get as much inventory as possible, and monetize it at the highest cost they can.

"Sometimes the dialogue with Shuman or Reggie Davis from Yahoo can be somewhat contentious, but I think it's healthy for the entire industry," Cuthbert said. "(Click Forensics) has the interests of the advertisers at the forefront, and we'll continue to keep the pressure on to make sure they get the transparency they need. But we need to bring the entire community together--from the publishers, to advertisers, to the engines--to solve this problem."

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