• by Laurie Sullivan  @lauriesullivan, January 13, 2009

Anchor Intelligence next month begins testing a platform that rates Web sites in publisher networks. The platform will tell advertisers, ad networks and search engines whether the sites generate good, poor or fraudulent traffic.

ClearMark for Websites--a Software as a Service (SaaS) application several months in the making--works alongside Anchor's ClearMark platform, which focuses on detecting fraudulent clicks. The new application pulls in site-level characteristics, third-party data and observations of traffic quality to score each site. The scores are supplemented daily with updates on site characteristics and new traffic information.

Two ad networks in California will participate in the February trials, with a "wide-scale release" planned for March or April, according to Ken Miller, CEO and cofounder of the Mountain View, Calif. company. AdEngage, AdBrite, GenieKnows, LookSmart, Technorati, and VivaKi already rely on ClearMark to monitor clicks, but it's not clear whether they will add the new app, too.

Miller declined to quantify the increase in click fraud during the past year, but said "the surge in complexity of the bad guy's efforts has risen and many have become more sophisticated in their approach to commit fraud."

Take, for instance, the surge in worms infiltrating computers linked to the Internet--turning them into bots that automatically click on ads without the owners' knowledge, Miller explains. "You're at work and you have no idea that your computer is going around the Internet clicking on ads," said Miller, who began to notice a surge in activity during the last two quarters.

Click-fraud rings use computer worms, adware, social network sites and videos to carry out the deed. They set up hundreds of dummy publishers to carry out large-scale, highly distributed attacks from locations in Southeast Asia, the United States and Western and Eastern Europe.

From research required to design and build ClearMark for Websites, Anchor released a 12-page report on click fraud, "Anatomy of a Click Fraudster," to provide ad networks, advertisers and search engines with a tool to understand and fight fraud. The research stems from a year-long evaluation of traffic patterns across the company's client base and data gathered on four fraudulent behavioral patterns.

The paper describes click-fraud behavior and suggests that advertisers need to watch for significant variations in campaign performance, and monitor competitors and high-dollar terms. It also describes malicious intent, and how competitors look to make money, such as clicking on ads in an attempt to drain budgets.

The report describes one variety of fraud as "kit sophisticate." Kits come in a variety of packages and price tags. Fraudsters use kits to create hundreds of Web sites, mass register accounts, generate ad clicks, and build botnets. For instance, ClickingAgent, an ad clicker kit by LoteSoft, saves Web site owners the trouble of creating valuable content that attracts real readers by simulating regular ad traffic for $100.

"You don't go through that type of effort unless you're serious about this sort of activity," Miller said. Miller saw the same thing at PayPal and eBay, where people committing fraud would steal a credit card, buy a high-dollar item online and get someone in the states to receive it with the promise of some sort of payment for their efforts.

"Seeing the same profile pop up with click fraud is very disconcerting," said Miller, who left PayPal to join Anchor in 2006, along with Marc Brown, Jim Pitkow and Ron Conway.