Jun. 28th, 2006

BlackFoot calls Time Out on Click Fraud.

Friday’s Wall Street Journal was all atwitter with reports that big advertisers like McDonald’s have discovered the power of timing their online ad buys.  Mickey D’s successfully prompts diners to grab breakfast in morning campaigns. Sleep aid Ambien reaches insomniacs on the Web late at night and Bud reminds stock traders to grab a beer after the market closes.

And Xerox, well THEY use the Web to sell copiers to people at work.

I threw up in my mouth a little at that one.

Of course business to business advertisers want to reach businesses. Honestly.

So we ask, how is this news? Marketer’s already time broadcast TV and radio. They will naturally apply similar strategies online.

The real news is that Internet marketing data is often bogus.

Another Journal article about click fraud earlier this week reminds us that advertisers know surprisingly little about online punters:

"The rise of "pay-per-click" online advertising, celebrated for turning Google and Yahoo Inc. into enormous businesses, is proving a boon for cyberthieves. Hackers are using increasingly sophisticated computer programs to automate phony clicks on Internet ads and then hide the click fraud from detection. This threat, though still small, poses a challenge for Google, Yahoo and other Internet companies that sell pay-per-click ads and need to assure advertisers that they are paying for legitimate clicks from potential customers." Riva Richmond, June 15, Wall Street Journal.

We recently experienced click fraud first hand.

After alerting Yahoo to unusual activity in one of our campaigns they referred us to their fraud department and provided a full credit, no questions asked.

Sensing whitewash, your intrepid bloggers ran their own investigation.

Analysis of the IP address data for each click revealed the suspect traffic had originated from a range of servers over several hours. Hardly the pattern we were expecting.

These clickers were sloppy. They went hog wild on just one keyword. And someone was paying attention.

But honestly, if click fraud is well disguised, how can a savvy marketer catch it?

"I’d say that about 5%-15% of traffic to online campaigns is bad” comments Martin Wesley of the online marketing intelligence company, Blackfoot. "Most marketers (and their agencies) simply ignore the issue."

He’s not alone. Other experts believe the problem is pervasive:

"We’ve seen indications that the overall losses due to click fraud could equal more than $1 billion — larger than the total magnitude of credit card fraud in the U.S.," says Kandathil Jacob of Fair Isaac.

They should know. Fair Issac analyzes 85% of U.S. credit card transactions.

So its no wonder companies like Wesley’s are on such a tear. Blackfoot offers greater visibility into the click stream, more reliable ad serving (which is also fraught with disrepancies), and to scrub data clean of errant clicks.  (Dear reader, in the interest of full disclosure, Blackfoot is a client of the Mortar home to MortaBlog).

Unlike my paltry examination of IP data, Blackfoot’s new Click Fraud Report Module automatically weighs a range of factors including bot and spider traffic, visits from organizations with a record of malicious activity as well as IP address and click pattern veracity.

Blackfoot’s customers can submit completed click fraud reports to online vendors with a request for full credit.

Now BlackFoot isn’t the only company to offer click fraud protection.

But unlike their rivals, Blackfoot goes much further.

By adding offline information — the material marketers get from credit reporting agencies and magazine subscriptions — Blackfoot can provide a much tighter profile of who clicked on what.

So, when McDonalds thinks its offering breakfast to suburban dad’s on their way to work, Ronald may really be serving what the India Times calls “India’s secret army of online ad clickers” (See Wired "Click Fraud Threatens Web).

Two of the original VCs who backed Skype and Doubleclick just put $2.5 mill into Blackfoot (read the release).

I guess they know a good thing when they see it.

Now that’s a story.


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