• by Laurie Sullivan , Staff Writer @lauriesullivan, July 21, 2010

Publishers and search engines need a better system to protect themselves and consumers against fake companies injecting viruses through ads and selling counterfeit goods. Companies like Click Forensics monitor display ad click fraud, but as Paul Pellman, the company's chief executive officer pointed out at OMMA Ad Nets on Monday, not enough has been done.

Chinese search engine Baidu this week became the latest accused of not doing enough to protect consumers from clicking on ads for counterfeit drugs. China Central Television (CCTV) reported Sunday the search engine, which holds about 70% search share in China, became the latest to profit from paid-per-click (PPC) ads that lead to several Web sites.

CCTV, the Chinese government news agency, claims several thousand people had bought counterfeit medicine as a result of sponsored keyword ads on Baidu. It's a case of fake companies setting up ads to sell fake goods. Publishers need a way to protect companies and content. Regular MediaPost readers probably read Monday "Ad Nets Not Doing Enough To Stop Fake Ad Sales And Malware." Apparently, companies supporting PPC ads on engines and Web sites through adCenter and AdSense wrestle with similar problems.

Search agency WebVisible, which supports local online businesses, avoids placing ads from unrecognizable national pharmaceutical companies, in part, for this reason. Kirsten Mangers, the company's chief executive officer, says the worst she's seen reside in puppy mills. Recently becoming a proud owner of a Wheaton soft-coated Terrier, I ran into a few puppy mill PPC ads and Web sites myself while making a decision on a dog breed.

In fact, Mangers tells me last year WebVisible helped "bust" 40 puppy farms by alerting hosting companies. These fake companies secure a domain, set up Web sites, and secure ecommerce features. Technically, it's easy to set up a "business in a box." Most of the hosting companies also offer SEO, PPC and display services, add-ons to the domain. These hosting companies don't always have the ability to check hundreds of thousands of small merchant Web sites. She says they scan the Webs sites for pornography.

WebVisible scans every Web site that comes in to purchase PPC ads. They not only look for the optimization tactics or metatags, but also look for the IP to see where consumers are dropped on the Web site. WebVisible takes down the search ads and the hosting companies take down the Web sites. "We partner closely with folks and let them know the good old specifications and standards," Mangers says. Most of the ads for puppies appeared in search ads because it's easy. No graphics or images needed, just text. But other companies do see click fraud and counterfeit products in display ads.

By the way, Click Forensics released its Q2 2010 advertising audience quality figures Wednesday. The overall click fraud rate for display ads rose slightly to 18.6%, up from the 17.4%, sequentially, and 12.7% compared with the same quarter in the prior year. In Q2 2010, the countries outside North America with significant CPC traffic producing the greatest volume of click fraud were Singapore, Pakistan, Japan, Ukraine and China respectively.

Click Forensics attributes the uptick to more sophisticated attacks from botnets and automated programs like malware. The company also sees more attacks as the financial incentive to commit fraud.