Tuesday, June 23, 2009

Microsoft Files lawsuit against individuals for fraudulent clicks

Last night I was reading some articles relating to the Internet and search engine clickthrough rates and came across an article that attracted my attention. It was the first time I came across a search engine owner that files a lawsuit again those that try to manipulate search results by creative clicking

The rivalry for search engine rankings can sometimes lead to "creative clicking"...where competing companies click on adwords, or paid for search results so as to deplete the advertising budget of rival companies so that Fraudster research results gain ranking and can then attract normal customer clicks.

The company in question in this case is Microsoft who is seeking at least $750,000 (£456,000) in damages from the defendants, claiming the three set up a number of false companies in March of last year and targeted ads for car insurance firms and the computer game 'World of Warcraft

In March 2008, Microsoft received complaints from car insurance advertisers who said traffic to their ads was spiking in a suspicious manner.

Microsoft investigated the claims and found an unusual number of searches for "auto insurance quotes" and a high click-through rate for the top paid search ads.

A similar scheme was being carried out with the keywords "World of Warcraft", Microsoft found.

Microsoft estimates the alleged fraud cost the advertisers in the region of $1.5m.

The company tracked down the source of the clicks and found the lion's share came from two Canadian-based proxy servers.

Microsoft claims that the three defendants set up fraudulent auto-insurance companies or worked with legitimate firms and bombarded the top-ranked ads with clicks, depleting the companies of their ad budgets and sinking their ad placements.

The defendants then placed their own ads on Microsoft's adCenter, which quickly rose in results rankings and were clicked on by actual customers. The group then sold the personal data of legitimate customers to low-level advertisers, Microsoft claims.

The lawsuit is a rare instance of a search engine going after individual advertisers and not the other way around.

Google was one of the first companies to do so in 2004 when it sued advertisers who were clicking on their own AdSense ads to make money.

Microsoft General Counsel said that this is a significant case. It shows that more companies are becoming active in the fight again online fraud which does not only entail credit card fraud. In this case, people where trying to change the economies of the game, by making it more expensive for companies who buy adwords."

According to Click Forensics, which measures global click fraud rates with its quarterly Click Fraud Index, about one in every seven clicks (13.8%) is fraudulent.

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