Outsell, Inc. Pegs Click Fraud as $1.3 Billion Problem that Threatens Business Models of Google, Others

Business Wire, July 5, 2006

BURLINGAME, Calif. -- Study Shows 27% of Advertisers Slowing or Stopping Pay-Per-Click Ads Due to Fraudulent Billings

WHAT:

Outsell, Inc., the leading research and advisory firm for the information industry, has released the first report to quantify the click fraud problem in real dollars.

The report estimates click fraud as a $1.3 billion problem that is significantly reducing advertisers' pay-per-click spending and threatening the core business model of search engines like Google.

"Google, Yahoo! and MSN are stonewalling on click fraud, to their own and others' detriment," notes Chuck Richard, who led the study of 407 advertisers responsible for about $1 billion in ad spending.

AMONG KEY FINDINGS:

--27% of advertisers have already slowed or stopped their pay-per-click advertising, including 16% in this group who have curtailed spending altogether. The average spending reduction is 33% of total PPC spending.

--Another 10% of advertisers have plans to cut their PPC spending budgets.

--On average, advertisers estimate that 14.6% of the clicks they're billed for are fraudulent, representing about $800 million in spending for fraudulent clicks in 2005.

--The total impact to advertisers is $1.3 billion (the $800 million wasted on fraudulent clicks plus $500 million no longer spent on PPC).

FOR MORE INFORMATION

Journalists who would like to talk with Outsell about the report should contact Dawn Ringel, Warner Communications, 781-449-8456 or dawn@warnerpr.com.

Companies that would like to purchase this report should go to http://content.outsellinc.com/coms2/summary_0245-3282_ITM or contact Outsell directly at 650-342-6060 or info@outsellinc.com.

ABOUT OUTSELL, INC.:

Outsell, Inc. of Burlingame, CA is the leading research and advisory firm providing actionable market analytics for the information industry. Founded in 1994, Outsell helps publishers, commercial information providers, and content software technology vendors identify, maintain, and grow markets and revenue streams. Outsell also works with information management executives in top corporations, government agencies, and educational institutions to benchmark spending, optimize performance, and demonstrate best practices. Outsell invests heavily in unique information industry data assets that form the core of its high-quality, fact-based research, analysis, and recommendations for clients worldwide. For more information, see www.outsellinc.com.