• by Mark Walsh  @markfwal, March 18, 2008

Faced with a growing threat to Web marketing, Yahoo and Click Forensics are combining efforts to battle click fraud in the first partnership between a search engine and an online auditor.

The arrangement will allow advertisers to securely share sensitive account information, such as Web site click data, with Yahoo through Click Forensics to help weed out low-quality traffic including click fraud.

"Click Forensics will also provide additional advertiser feedback to Yahoo in an effort to help improve traffic quality," said Reggie Davis, vice president of marketplace quality at Yahoo, speaking on a click fraud panel Monday at the Search Engine Strategies conference, where the partnership was announced.

Davis said the move would complement other steps Yahoo is taking internally and externally to combat click fraud, which forces Google to toss out 10% to 15% of the clicks on Yahoo search ads.

Tom Cuthbert, president and CEO of Click Forensics, who also sat on the panel, said the joint effort with Yahoo signaled a unified front against click fraud. "This means we're going to work together on your behalf to identify and find these bad clicks," Cuthbert told the audience. "I applaud Yahoo in taking a really bold step in working with a third party."

He went on to warn conference attendees that the problem of click fraud "is getting worse, not better." He cited a USA Today article Monday focusing on one of the latest and most insidious forms of fraud-botnets. These networks of thousands of computers hijacked by profit-seeking Web crooks now affect 40% of the computers connected to the Internet, according to research data from Support Intelligence cited in the article. "Botnet scams are exploding," Cuthbert said.

Compromised computers are used for everything from e-mail spam to stealing sensitive information from shopping sites. Among other mounting threats to online marketing that Cuthbert identified were suspect out-of-country traffic, "click farms" (large groups of low-wage workers clicking around the clock), NDS pharming (attempts to redirect traffic to a bogus site) as well as low-quality traffic on social networking sites and domain-parking sites.

Cuthbert wasn't completely without hope. In addition to cooperative efforts like those between Yahoo and Click Forensics, he noted that better tools are emerging to help improve traffic quality, and that publishers are becoming more aggressive in blocking low-quality traffic. He and Davis also pointed to ongoing efforts by the Interactive Advertising Board to develop industry guidelines related to click fraud. Davis said he expected the IAB guidelines to be issued by the end of summer.

Google hasn't yet teamed up with an auditing service in the manner of Yahoo and Click Forensics. Rather, the search giant relies on automated filters and offline analysis by its traffic quality team to fight click fraud, according to Shuman Ghosemajumder, business product manager for trust & safety at Google and a fellow panelist. In rare cases, the company will also pursue specific investigations into alleged instances of fraud.

Erring on the side of caution, he explained that Google sometimes initially detects "false positives" for click fraud. "We cast a net for invalid clicks wide enough so that we have a high degree of confidence that we are catching the actual malicious clicks," Ghosemajumder said. Panelists noted that determining harmful intent with regard to questionable clicks can sometimes be difficult.

For its part, Google says that invalid clicks, including click fraud, account for less than 10% of its search traffic. As to why Google's invalid click rate is lower than Yahoo's, he surmised that it could be because the company simply has a higher query volume overall than Yahoo, resulting in a small proportion of bad clicks.

Google agreed to settle a class action over click fraud brought against the company and other search operators, including Yahoo and AOL in 2006 for $90 million. Davis said Yahoo had settled the litigation brought by pay-per-click advertiser Lane's Gifts & Collectibles for $5 million.

Yahoo's Davis also acknowledged that invalid clicks on ads running on its content network had jumped up to 32% during the fourth quarter of 2007. He attributed the spike to an increase in traffic from "pay to read" networks, which pay users to click on ads, and from out-of-country clicks from Germany and Russia.

In response to such an increase of bad clicks, he said Yahoo typically modifies its automated filters or adds filters to sift out undesirable traffic. Davis said the proportion of invalid clicks on its content network during the first quarter of 2008 had begun to decline again.