Research firm Outsell has released a new report that estimates that click fraud forced PPC advertisers to pay for $800 million in fraudulent clicks, and reduce their spending by another $500 million. As a result, the PPC industry loses about $1.3 billion.
The study examined the online advertising habits of 407 advertisers in May, who control about $1 billion. 27% of them reduced their PPC spending because of click fraud, while another 10% planned to cut their PPC budgets. According to the advertisers, they had to pay approximately 14.6% of their budget for fake clicks.
The report also offers suggestions for addressing the problem of bad clicks, and examines some of the signs of click fraud so advertisers can know when they’re being hosed. It also examines how the major PPC players Google, Yahoo, and MSN, as well as third party services, are protecting advertisers against fraudulent clicks. But Outsell also admits that these media giants are not doing enough. “Google, Yahoo! and MSN are stonewalling on click fraud, to their own and others’ detriment,” said Chuck Richard, Outsell VP and the study’s lead researcher, in a statement.