• by Wendy Davis  @wendyndavis, December 7, 2006

Signaling the growing prominence of search engine marketing, the American Association of Advertising Agencies Wednesday sent members a bulletin outlining basic facts about click fraud.

The report marked the first time in recent years that the trade group addressed click fraud, said Kipp Cheng, vice president and director of public affairs for the association. Much of the report--based on a click fraud panel discussion in October--summarized information that has been discussed at length among search marketing experts, but is still relatively novel to more traditional media executives.

Among the bigger issues tackled by the report was the definition of "click fraud," the distinction between fraudulent clicks and "poor quality" clicks, and whether marketers should be required to pay for the latter.

Generally, marketers and search engines consider clicks fraudulent when made in bad faith; while there are several scenarios, one of the most common occurs when publishers that get a cut of the pay-per-click fees click on ads on their own sites. The report itself defined click fraud as "a person, automated script or computer program clicking on a paid search ad, adversely affecting the advertiser who received the click, often to the benefit of the publisher."

Although marketers and search engines agree that those clicks shouldn't be charged to advertisers, there is less consensus about the "poor quality" clicks that occur when users click on a site they don't have any interest in visiting--either because they misunderstood the ad or by mistake. The 4As bulletin stated that large search engines probably weed out low-quality clicks, but stopped short of setting definitive standards for when marketers should not be charged for them.

The issue has sparked enough controversy that the Interactive Advertising Bureau in August formed a working group to create guidelines for click measurement, including standards by which clicks are counted or invalidated.

The 4As report also offered general recommendations for detecting click fraud. The trade group advised marketers to compare the data from their own analytics tools with their serach engine bills. If there is a discrepancy greater than 10-15%, agencies should work with both the search engine and analytics provider to determine the cause, the report recommended.

Participants in the 4As panel discussion in October included Kevin Lee, executive chairman of search engine marketing company Did-It.com and chair of the Search Engine Marketing Professional Organization; Shuman Ghosemajumder, Google business product manager for trust and safety; Michael Leonard, CEO of click fraud detection firm Authenticlick; and Michael Caruso, CEO of click fraud detection firm ClickFacts.