For those of you deeply involved in Search Engine Marketing (SEM), you are aware of the costly issues dealing with Click Fraud.

For newbies, Click Fraud is when someone or something (a ’spider’) ‘clicks’ on a paid ad listing without any interest in the ad or intent on buying from the advertiser.

What’s the big deal? Well, statistics show that nearly 30% of your budget could be swallowed by Click Fraud so you be the judge!

This phenomenon first hit the web scene back in 2000 with the biggest players Google and Overture (now Yahoo!) turning a blind eye.

I remember back in 2004, when asking Google why certain keywords were costing US$3,000 one week and US$30,000 the next. They simply said that they could not be sure. When pressed further, they offered a token 15-30% discount which obviously failed to satisfy us other than helping increase our budgets with Yahoo! where we saw little evidence of Click Fraud at the time.

In late 2004, Google finally came clean when their former CFO famously stated,

I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model.

Google subsequently paid US$90 million to settle a lawsuit in Arkansas related to Click Fraud but it persists.

A recent posting on TechCrunch shows that the battle against Click Fraud seems to be slowing some but to be sure is anyone’s guess.

TradeMediaBlog management has been involved in SEM since 2002 and strongly believes in this effective marketing tool. We strongly advise all trade media companies to include SEM (and SEO) in your annual marketing plans/budgets. Ask us why if you are not sure.

What do you think about it?