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Chad M. Little founded AdOn Network in November of 1998 and raised over $7 million in venture capital funding. He successfully led the company through the difficult economic downturn and into profitability during the recession, when most Internet ventures fell by the wayside. His ongoing responsibilities include the definition of the company's business strategy, cultivating business development opportunities, and the establishment of strategic industry partnerships.

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Choose or Lose (Money): Why Power of Choice is the Ultimate Click Fraud-Fighting Tool

Written on
November 1st 2006
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by Chad Little  |
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From the recent BusinessWeek article to the daily Newsletter publications and Blog entries, the issue of click fraud continues to come to the forefront of the Internet Advertising industry. The issue has increased in significance to that point that fighting click fraud has become an industry unto itself with companies like Click Forensics and others that are dedicated to taking up the cause for the benefit of advertisers, agencies and search providers.

Depending on the research you read, click fraud can account for 10% to 15% of all clicks. That would seem to imply that 10% to 15% of all online ad budgets are being diverted to fraudulent traffic. However, as Alan Chapell, President of Chapell & Associates, pointed out in a recent article Re-Evaluating Click Fraud, that percentage does not take into account the amount of fraudulent clicks that are already detected by networks and search sites which the advertiser is not billed for.

Regardless of how you choose to interpret the numbers or how you define click fraud, the root of the issue is traffic that does not convert, be it click fraud or any other source of traffic that generates a poor return on investment (ROI).

If the source of the click fraud issue is found in individual traffic sources, then it would seem to reason that providing tools to evaluate the performance of each individual traffic source would provide advertisers with a powerful tool to fight click fraud.

In a follow-up to the BusinessWeek article on click fraud Martin Fleischmann, CEO of MostChoice.com, Fleishmann urges ad networks to “allow advertisers more control over where their ads appear.” He addresses this issue by suggesting that ad networks create a three-tier system to help categorize traffic sources. In this proposed model, traffic sources would be grouped together into one of three categories: Big portal, small portal and search-only affiliate sites.

While the three-tier system he suggests would be a positive step, the advertiser is still limited to choosing between sub-sets of traffic sources, rather than individual traffic sources. This is analogous to an investor choosing to invest in mutual funds as opposed to individual stocks. For an investor they are placing their trust, and ultimately the control of their finances, in the fund manager to make wise decisions as to which stocks to purchase. For the advertiser, this approach still places the control largely in the hands of the ad network as they would be the ones defining which traffic sources would be assigned to each category.



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