Outsell concluded in their new publication that Google, Yahoo! and MSN are stonewalling on click fraud, to their own and others’ detriments. It was estimated $800 million that advertisers have paid to the search companies were fraudulent.

This translates to nearly 15 percent of ad clicks were frauds, from the total of $5.5 billion online ad spending last year (2005).

Advertisers have failed to spend another $500 million because of click fraud concern. The survey and study indicated 27 percent of advertisers have reduced spending on pay-per-click advertising. Not included were 10 percent who have planned to do so in the future.

“The industry must openly admit there is a major problem, adopt independent audits and open itself to new approaches created through collaborative solutions with GYM (Google, Yahoo! and MSN), publishers, advertisers and the hacker-geek community,” Ricard said.

Search companies like Google began to try CPA based programs and pricing. That could mean the fraud has caused significant concerns not only to advertisers but also GYM.

It is also very important for GYM to be transparent to both advertisers and publishers.

Source: Mail & Guardian.