While attendance at SES San Jose was definitely down this year, it was still a great show.  I enjoyed meeting people at our booth and appreciated the hard work of our team pulling that all together.  We met a lot of interesting folks and enjoyed hearing feedback on the new Click Forensics dashboard.

The big hit, of course, were the “Stress Einstein” squishys! Who wouldn’t want of these guys!  They reminded me of the bobble-heads in “Night at the Museum 2″  

I also enjoyed participating in a session titled, “Ads in a Quality Score World“.   Mike Grehan moderated the panel and both Yahoo (Tomaso Pozzi) and Google (Jonathan Alferness) participated.  WebProNews covered the session and wrote a nice recap. 

The other highlight of the week for me was our Click Quality Council dinner.  We had over 25 executives from ad networks, publishers, advertisers and search engines join us for a great dinner of conversation, networking and fun!

The conversation is always interesting when you have people representing all corners of the online advertising ecosystem.  It was the third year we have hosted the CQC dinner in San Jose and our 13th since the Council was formed in 2006.

Congratulations to the newlyweds… after a long, long courtship Microsoft and Yahoo finally managed to get together (the prenuptials are still being sorted out!).  I have been in favor of this union for sometime now.  Google owns a ridiculous share of the pay per click advertising market and desperately needs a competitor.  Microsoft + Yahoo = Competition.  As I have said for the last several years, the lens we look through at Click Forensics is that of the advertiser.  Competition is always good for the advertiser.  

The growth of online advertising, in particular pay per click advertising, has been meteoric. It is a great model and one that has proven hugely successful for hundreds of thousands of advertisers large and small.  It is a model that will continue to grow as large advertisers shift more dollars from unmeasureable and less effective traditional media.  It will grow because it uses context, targeting and relevancy to the highest level.  Yahoo’s audience enhanced by Microsoft’s technology will mean innovation and efficiency.  There is no doubt; Google will continue to have success.  But the new partnership will make the online world even more attractive for advertisers.

Today there are standards in place to help hold the search providers accountable.  There are better reporting, campaign management and keyword tools to add to the efficiency.  I see a world in the near future where display advertising will begin to make significant gains from the data that exists in search. Context, targeting and relevance can improve every medium and this partnership will leverage that data to a much higher level than before.

So congrats to you both for a new start.  The entire advertising community is pulling for you and expecting big things. I do need to warn you… expectations are high and the honeymoon is short.  

Over the past week four major players in the online media space have announced accreditation to the Interactive Advertising Bureau’s Click Measurement Guidelines.  This list includes Yahoo!, Google, Microsoft and Business.com.  I wanted to take a moment and explore why you should care about this development and what accreditation means for advertisers.

The IAB is a publisher-focused organization that has led the process to develop click measurement guidelines.  The task force is made up of thirty or so companies representing the online advertising community.  Click Forensics has been a member since day one and participated in every step of the process.

There are three main benefits for advertisers and conversely, three concerns advertisers need to keep in mind associated with the entire process.  First, the benefits;

IAB Accreditation Represents a Commitment
The process to become accredited to the IAB guidelines is time consuming and certainly not free.  At Click Forensics, we have first hand knowledge of this and can assure you that any company that takes time and spends the money to become accredited is committed to their customers.  The level of detail the auditors go into is amazing.  Our community is fortunate to have auditors that have demonstrated a deep commitment to both the development of the process and the implementation of the guidelines.

IAB Accreditation Demonstrates Leadership
The IAB established a gating period to allow member companies and others to become accredited to the guidelines.  The companies mentioned above were the first to announce compliance.  This is important because it represents a sense of urgency among these four that enhances the urgency for others.  As an advertiser, you should reward these leaders with business.  They were first out of the gate and in my book that demonstrates leadership.

IAB Accreditation Means Better Quality Traffic
The IAB Guidelines are a lengthy narrative of “best practices” and rules in delivering quality traffic to advertisers.  While it is not intended to be a complete list, it serves as a firm foundation and includes practical steps to help ensure advertisers get what they pay for.  By working with an accredited ad provider, advertisers will be assured that the clicks they are buying have met the guidelines established by the industry.  This is a good thing and an excellent first step.

While we applaud the efforts of the IAB, Media Rating Council and member companies who participated in this process, there are things advertisers need to keep in mind.  There was a great deal of discussion and debate during the nearly three years of meetings it took to develop these guidelines.  In that process, there were a lot of valuable and important items that fell to the floor.  This is a good start, not a perfect process.  Keep in mind the following;

IAB Accreditation is a “Moment in Time” Process
The process for an ad provider to become accredited is a long one.  The auditor is invited in for a pre-assessment then the actual audit begins.  At the end of the process accreditation is awarded.  The problem is there is no mechanism for ongoing compliance.  When we buy gas at the gas station there is a meter that is routinely calibrated to ensure that when we fill our tank with 20 gallons of gasoline, we get 20 gallons.  This approach is not taken nor addressed in the guidelines.  While an annual audit is suggested in the guidelines, it is still important for advertisers to be monitoring their campaigns and holding the ad providers feet to the fire for every click.

IAB Accreditation Does Not Cover Everything
The 27 page Guideline document is quite comprehensive.  Our task force worked hard to ensure that both the guidelines are made clear and that the standard for measurement is defined.  However, when you consider that the dominant constituency in this process was multibillion-dollar ad providers, you might imagine not everything met their liking.  A few examples of chaff that hit the threshing room floor included:

Click ID – Each click should have a unique identifier so investigations can be “apples to apples”
Persistent Cookie – It’s important that ad providers can identify unique visitors to ensure they are billed for only once.
Standards for Investigation – Advertisers deserve to feel confident that they get what they pay for.  By setting an investigation format and agreeing to a timeline, ad providers can build trust with customers.

IAB Accreditation is a Roadmap
There is a Japanese proverb that says, “Beginning is easy and continuing is hard”.  There is truth in this as it relates to the guidelines.  We have begun the process.  We have released guidelines that will make the world of online advertising a better place.  Now we should look to leadership to take the next step and continue what we have begun.  The current guidelines will serve as a roadmap to the future standards.  We need to examine the items removed, listen to the community and think of better ways to ensure advertisers get what they pay for in the future.  The roadmap has been built.  Now we need to move on.

In January of 2006 as Click Forensics was just beginning as a company, I wrote the following challenge to our industry:

“Define standards for what an unwanted click looks like. We believe that there are certain characteristics or attributes that are common to a large percentage of click fraud. We are working with publishers and advertisers to agree on common ground and work together to expose it. Once this is developed it should be published so that the entire community can benefit from it.”

Today, over three years later, we have the cooperation of community leaders, the foundation of technical standards and the desire to continue to improve on what we have built.  I invite you, to join us as we build a future of ongoing growth and improving effectiveness by enhancing the process of online advertising.  I can assure you that both the Click Quality Council and Click Forensics will continue to support the work of the IAB and other industry organizations to work together to make our community a better place.  Let’s not stop with the foundation.

From spyware to bots to viruses and other unimaginable hazards… the web can be a scary place.  As far back as Prodigy in the early days of the online world, scams have been a part of the party.  The Internet is simply a new way for the bad guys to rip off unsuspecting consumers.  The key difference though is that the reach is enormous and the damage can spread to more people, more quickly than ever before.

Enter scareware, new way to trick unsuspecting consumers into parting with their money.  USA Today recently had an article  about the tricks and tactics used to perpetrate this latest rip off.  Unfortunately, online advertising has become an accomplice to the crime.

Scareware is worthless software that allegedly removes viruses from your computer.  Anyone who has surfed the web knows how easy it can be to become infected with a virus.  The damage to the users computer is often measured in slowed performance, unwanted clicking and potentially even more nefarious things like key logging and password swiping.  Now, the bad guys are selling “scareware” to solve a problem that may not actually exist.

The first such program was called “SpySheriff,” built by a team of cyber crooks from Russia.  The Anti-Phishing Working Group recently reported that scareware infections rose 48% in the second half of 2008.  The growth is tied to the ease of distribution and weaknesses in online advertising and the web in general.

There are several ways these fake products are being distributed.  Phony pages are created using hot search key words such as “American Idol” or “iPhone” and drive the unsuspecting consumer to the infected page.  Recently the Facebook email scam was used to send people to a page by promoting things like “best video.”  Since these emails came from your friends, millions clicked.  Twitter has become a vehicle for distribution. Phony Twitter accounts are created and enticing titles of posts encourage people to click.
 
Additionally, the bad guys are simply buying display or search ads.  They rotate in infected pages to the landing page.  It is virtually impossible for an ad provider to scan every ad impression and linking page.  This loophole creates an opportunity for the bad guys to drive significant traffic to infected pages at a very low cost.  Microsoft reported finding 4.4M installations of one such program, so the scale is enormous.  Do the math… at $49 or $79, that is big business.

Once someone lands on the page, getting off is nearly impossible.  Immediately upon landing, a “system scan” begins.  The results are, of course, showing that your computer is infected with a number of viruses.  Conveniently you can buy the product at that point and they take your money and run.  If you try to move away from the page, or cancel, an endless number of scans take over your screen.  Essentially, users must “control/alt/delete” their way out or restart.

The danger in this scam is not limited to monetary damage to the consumer.  These type of pages and methods to attract clicks are the same methods used to install spyware, malware and perpetrate click fraud.  To their credit, USA Today has done a good job over the last few years of highlighting the dangers of the web to the average consumer.

The FTC is cracking down.  They have identified products like WinFixer, DriveCleaner and XP AntiVirus as worthless and they are going after the owners.  The problem is that like the click fraud crooks, these guys are in remote locations and move their servers often. Tracking them is a full time job and extremely difficult.  The search engines are trying to help as well.  Bing has a neat feature that highlights “at risk” url’s.  Yahoo has similar product built with McAfee.

 
Trust is what keeps consumers clicking on ads.  Without stepped up industry efforts from organizations, like the Anti Phishing Working Groups and others, trust could be diminished.  Like click fraud, scareware is damaging trust.  It takes a community effort to stay after the problem and build solutions to take the scare out of the internet.

This past week in New York during the Search Engine Strategies conference, we sponsored a VIP dinner for the Click Quality Council.  Attendance was robust.  Although the food and drinks were excellent (thank you, McCormick & Schmick’s) I think the enthusiastic response to the CQC invite was more about the guest list than the menu.

In attendance were a wide variety of senior executives from large ad networks, online publishers, and agencies, including at least three CEOs and a dozen VPs.  Tom Cuthbert, president of Click Forensics, served as host and MC for the evening.  Some of the special guests included Dr. Alex Tuzhilin from NYU, a recognized authority on click fraud and online traffic quality, and author of the famous Lane’s Gifts v. Google report, as well as Joe Lazlo, Director of Research for the Interactive Advertising Bureau (IAB).

Joe was an especially welcome guest in light of the imminent Click Measurement Guidelines that the IAB will be publishing very soon.  Both Click Forensics and the CQC have been active participants in the discussions and debate that have formed the proposed guidelines.  Joe updated the Council on the fact that the guidelines were currently open for public comment, and provided a brief overview of what the guidelines (and the IAB itself) were designed to accomplish: ensuring advertisers get what they pay for.  Since that’s a core tenet of the CQC, the message was well received.

We thank Joe for his participation and hope to see him again at future events, perhaps even the next CQC Dinner in San Francisco on April 21 during Ad:Tech?

The remainder of the evening was filled with lively discussion about click quality and plenty of war stories having nothing at all to do with click quality.  I hope everyone found the evening as productive and enjoyable as I did.  Kudos to Laura Wolf for organizing and executing yet another successful event!

On a recent trip to New York, I was asked by an ad provider executive, “Which side are you on?” At first I didn’t know what he meant, but he clarified it for me by saying that in the world of advertisers, ad networks, publishers, and ad providers, it’s important to know whose side you’re on.

When I told him that we are on the side of the advertiser he paused, thought about it and then the light bulb went off. What’s good for the advertiser is good for our entire industry. 100% of the over $22B spent on search advertising comes from advertisers. They pay the bills for search engines, ad providers, parked domain companies publishers as well as those of us that are working to provide tools to improve traffic quality.

Despite our diverse client base, the lens Click Forensics looks through for every decision we make is that of the advertiser. While Click Forensics works with a number of advertisers and agencies, we also have many clients that are ad providers. This list includes search engines, ad networks, publishers and even parked domain companies. The reason these companies choose to work with us is that we provide insight into the traffic quality they are selling to advertisers. They are able to use this information to route, block, price and value the traffic to help advertisers get a better return on their ad spend.

Smart sellers look through this lens too. Companies like Yahoo that asked advertisers how they could improve communication. The result was the cooperative development of the FACTr system enabling advertisers to communicate concerns to Yahoo. Companies like Lycos, who realized early on that “quality matters” and began working to enhance their quality using traffic insight tools. And industry organizations including the Click Quality Council, while made of all parts of the ecosystem, is always advertiser focused.

Advertisers drive our industry and that reality will become even clearer in the future as mobile grows more important and display begins to look like search. We are proud of our involvement and the work of the Click Quality Council. The CQC is an example of an industry organization that is not dominated by one constituency. The over 100 members include companies from every corner and every perspective of the eco-system. They sit around the virtual table as equals, all understanding it is the lens of the advertiser that matters.

So this week, as the IAB releases the Click Measurement Working Group Guidelines, it is important that they are reviewed through the lens that matters, that of the advertiser. We should be asking, are these guidelines fair? Do they have enough substance to improve traffic quality and help ensure advertisers get what they pay for? Do the guidelines improve transparency and enhance trust between buyers and sellers?

I attended the IAB’s annual conference in Orlando this week and have a clear picture of their lens. We applaud the IAB’s leadership and the work of the Media Rating Council and task force members who produced a foundational document. Our hope now is that we can work together to build on this foundation to build trust, enhance transparency and accelerate the growth of online advertising.

Its no secret our county’s economy is slowing and times are getting tough.  While there is great optimism, there is an undercurrent of concern.  In anytime of economic downturn, one unwanted byproduct is that crime increases (Statistics point to increase in crime).  This unfortunately includes cyber crime and specifically, click fraud.

For almost three years now Click Forensics has been tracking click fraud.  While the overall rate somewhat stabilized during 2008, the number of advertisers affected and the dollars lost continue to rise.  As we face more sophisticated attacks in 2009, I wanted to highlight some recent advances in the battle and share some specific steps advertisers can do to ensure they get what they pay for.

Cooperation has been a theme for 2008.  Progress is being made on three fronts by leaders in the industry.  First, the Interactive Advertising Bureau (IAB) continues its work on defining guidelines for counting clicks.  Click Forensics continues to take an active role in this important effort and supports it as a good first step.  Secondly, leading search providers, including Google and Yahoo!, have enhanced their products with better tools to manage campaigns and announced traffic quality centers to provide additional resources to advertisers.

The third initiative has been the joint effort of Click Forensics and Yahoo! to build the FACTr process (Fully Automated Click Tracking Reconciliation).  For years, advertisers have been frustrated when they have found invalid activity in their pay per click campaigns.  Now there is a simple, automated process that connects advertisers to the ad providers.  The FACTr system was built by Yahoo! and Click Forensics and launched publicly in July of 2008.  By the fall, other ad providers including LookSmart, Miva and Google were added.

While progress continues, here are specific steps advertisers can take to protect their online investment.  First, advertisers should monitor campaign performance at the most granular level.  Click fraud attacks come in spikes of activity.  By watching campaign performance on a daily basis, advertisers can see anomalies and alert the ad provider quickly.  Looking for spikes in clicks, drops in conversion ratios, and higher than normal impression levels are all signs something may be out of line.

Secondly, now is a good time to double check campaign settings.  A large number of unwanted clicks come as a result of campaigns not being set up correctly.  Look at geo-target settings to ensure they match your campaign goals.  Review day part settings to ensure you have optimal ad delivery for delivering quality traffic.

Finally, avoid paying for clicks from low quality traffic sources.  By utilizing the site exclusion functionality made available by ad providers, you can block bad clicks from ever getting to your campaign.  Click Forensics has a process called, Intelligent Exclusion™ that identifies bad traffic sources and eliminates them from the campaign.  We see a 43.5% decline in the overall invalid rate for advertisers who use this process.  Keeping the money in your pocket is always better than having to go back and ask for a refund!

Like you, we are hopeful that the economy will make a quick recovery.  As it does, we will benefit.  In the meantime, it’s more important than ever that advertisers are on the lookout for threats to their ad budgets.  You can count on Click Forensics to continue to work on behalf of the entire industry to bring solutions to the marketplace to ensure advertisers get what they pay for.

Just last week, I served as a panelist on a Search Marketing Now webcast titled: “Ad Networks Best Practices: Keeping Your Advertisers Happy.” Dana Todd, the CMO of Newsforce.com and President Emeritus of SEMPO, joined me and we covered the topic of quality in ad networks. In the webcast, Dana talked about best practices for ad networks and how they can manage traffic quality and value for their customers. Transparency between search engines, ad networks and advertisers was discussed as a key component to helping the industry solve the quality issue. You can listen to the webcast here.

On a related note, earlier last week InfoWorld’s Paul Venezia published a poignant article that stands as another example of why we need more transparency in the industry. He discusses Google’s apparent silence on why some of Paul’s web sites were recently kicked out of the AdSense publisher network. Like many others in the industry, Paul is in the dark on his standing with Google.

http://weblog.infoworld.com/venezia/archives/017511.html

Over the past two years we have been trying to bring attention to the real danger of click fraud. It is a real problem that is getting worse not better. Since we began reporting our Click Fraud Index, the overall rate has climbed over 20%. This problem has been highlighted in mainstream publications including Business Week, USA Today and the Wall St. Journal. No one today denies that click fraud is a problem and that it is having a negative effect on the growth of the online industry.

What may be less obvious is that click fraud is only the tip of the iceberg. The bigger issue for our industry is the overall decline of traffic quality. Advertisers want to get what they pay for and know that the traffic they buy has value. Problems including: the growth of botnets, out of country traffic and other low quality traffic sources like made-for-ad sites and parked domains are hurting ROI. Advertisers know this and have been demanding action from ad providers. One recent example is the poor quality traffic that comes from social network sites like MySpace. Google surprised Wall St by missing Q4 earnings due, in part, to their inability to monetize MySpace traffic. Social network sites are notorious for having very low sitescores.

So what is happening? Smart ad providers are taking matters into their own hands. They can’t afford to lose business and they are listening to their customers. By using real time tools to detect invalid traffic, publishers can block it, redirect it or re-price it. This is the way the industry is moving and we are working hard to lead the way. It is encouraging to see ad providers like Yahoo see the dangers ahead and help their clients steer clear. On the other hand, it is concerning others are on a collision course.

A couple of weeks ago at Search Engine Strategies in New York, Click Fraud made big news. Yahoo announced a partnership with Click Forensics that changes the tone of the ongoing “Click Fraud Debate”. Since late 2005 there has been denial, litigation, finger pointing, 17 page reports and lots and lots of media coverage around the topic of click fraud. In March of 2006 I wrote that, “It will take a community approach to solve the problem”. Since then the community of advertisers, agencies, third parties, publishers, ad networks, industry organizations and search providers has grown. We have all been drawn closer together to help solve the problem; not deny its existence. A visible result of that progress was the Yahoo announcement.

It was just over a year ago that I first met Reggie Davis. Yahoo was the first search engine to name a Vice President over Marketplace Quality. Reggie’s approach has been refreshing. He listened carefully and
took notes to what advertisers were saying. He worked with his team to implement solutions that helped improve transparency. And now, less than a year later, Yahoo is the first search engine to work with a third-party to fight click fraud.

This is real progress and a sign of things to come. For quite some time we have been drawing the distinction between traditional media (TV and Radio) and online. Advertisers are used to having standards, auditable invoices and notarized affidavit’s confirming they get what they paid for. It’s especially important because as pay-per-click industry expert, Dr. Tuzhilin, has noted: third-parties have access to data search engines don’t have. And that information is helpful for identifying quality issues such as click fraud. Yahoo! understands this and we’re now able to share this information to help Yahoo! help its advertisers.