Edelman Reports: Yahoo Beset by Click-Fraud
Anti-spyware guru Ben Edelman released a study yesterday on his blog connecting Yahoo’s earnings to fraudulent clicks. According to him, Yahoo’s media partnerships through their Overture ad network allows spyware vendors to purchase ads indirectly. Those spyware vendors can then send visitors through the Overture system without having clicked on anything, thus faking a click, and costing advertisers money.
“It was a necessary and foreseeable—predictable consequence of the business they’ve set up. I don’t think they specifically intended it…, but they put in place a set of economic incentives whereby this was completely inevitable,” Edelman tells us.
He cites specific examples of popup advertisers directing false traffic through Overture. In one of his examples, Edelman backtracks the money trail from a 180Solutions automated click through Yahoo, all the way back to the original advertiser. The original advertiser, according to him,ends up paying for a click that never happened.
In another example, Edelman shows how spyware directed him to an eye care website. He writes: “Furthermore, because my prior activity gave no sign of any interest in eye care, this popup sends the advertiser untargeted traffic — also contrary to Yahoo’s representations to advertisers.”
In addition to click fraud, Edelman also points out evidence of Overture 3rd-party affiliates generating untargeted, or even self-targeted ads, and instances of unlabeled sponsored links. He suggests that Yahoo could alleviate some of the problems by reducing the size of its partner network, screening them better, and prohibiting 3rd-party re-syndication. “If you don’t know who they are, and you don’t know what they’re doing for you, then you probably shouldn’t be in business with them,” said Edelman.
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