Will Click Fraud Shrink Blogger Revenues?

Posted on July 6, 2006

The San Francisco Chronicle (SFGate.com) reports on a click fraud study by Outsell Inc. that indicates click fraud is a serious and growing problem. Here are a few details reported by SFGate.com.

Clicks believed by advertisers to be fraudulent: 14.6 percent
Money paid by advertisers for bogus clicks: $800 million (2005)
Advertisers who said they were victims of click fraud: 75 percent
Advertisers who said they reduced click-based advertising or plan to: 37 percent
Revenue lost by Google, Yahoo and other Web sites, as a result: $500 million
Advertisers who request refunds because of fraud: 7 percent
Average refund: $9,507

Chuck Richard, vice president of Outsell, told SFGate that pay-per-click advertising is destined to be replaced.

"Pay per click is a really rudimentary advertising -- a baby step -- and it's destined to decline and be replaced by other advertising methods," Richard said.

Some blogging for money bloggers could be hurt financially if pay-per-click advertising is reduced because of the click fraud threat. Most bloggers don't make much money from AdSense or any other third-party advertising program. The exception are blogs with very high traffic and a targeted audience. If the Outsell study is accurate then some bloggers relying on pay-per-click money could be in for a shocker when their monthly checks shrink. However, it probably would not change blogging much overall because many bloggers are not in it for the money.