Just the other day a Q2 click fraud report was released by Click Forensics which to no surprise is up and at almost 20%… We’re talking about maybe a billion or two billion dollars worth of fraudulent clicks…. Most of the blame lays with domain parking companies.

“Now in its fourth year, the Click Forensics reporting service provides statistically significant data collected from Cost Per Click (CPC) advertising campaigns for both large and small advertisers across all leading search engines as well as comparison shopping engines and social networks. Traffic across more than 300 ad networks is reflected in the data. Key findings for Q2 2010 include:

• The overall industry average click fraud rate was 18.6 percent. That’s up from the 17.4 percent reported for Q1 2010 and the 12.7 percent rate reported for Q2 2009.
• In Q2 2010, the countries outside North America with significant CPC traffic producing the greatest volume of click fraud were Singapore, Pakistan, Japan, Ukraine and China respectively.

“Over the past several quarters, we’ve seen the overall click fraud rate slowly trending higher,� said Paul Pellman, CEO of Click Forensics. “The main reasons appear to be the continued sophistication of botnets and malware prevalent in the fast-growing search marketing space. We advise online marketers to be watchful of their campaigns as they spend more on search advertising in the coming quarters.�

So who the heck is responsible for all this click fraud… And what do domain parking companies have to do with it you ask? Well, click fraudsters come from all walks of life. There is some who only make $50 – $100 per day and then there are some that make 7 and 8 figures annually.. Running very sophisticated operations.

I blame domain parking largely for this record breaking numbers and much of the click fraud because they make it so easy to access PPC ads. You just get a random domain, switch name servers, and let the clicks flow and wait to get paid. They don’t really have any security measures in place to detect anything… They talk a big game, but trust me when I say…. They really don’t got shit.

There is even an underground market that is thriving for the past few years where certain companies’ domain parking accounts sell for $1000s of dollars each. Ones that are not easy to get into  (private / invitation only) and the ones specifically that are powered by Yahoo, because their entire PPC eco-system to begin with sucks at detecting click fraud while Google’s is a little better.

Even though traditionally Google’s feed pays more, click fraudsters choose Yahoo, because they can get away with it a lot easier. These people are on top of their game and have extremely well organized operations and money up the ass. If you were ever approached by somebody looking to buy or rent your parking account at a forum, e-mail or im’s… Well, you had your run in with a click fraudster.

Basically, they have shitloads of people sitting in packed to full capacity computer labs, remotely controlling infected computers thanks to malware and viruses. When the infected computer shows no activity, in other words it is idle… They load up the browser real quick, visit whatever parked domain they want… Click around.. BAM! There it is…. Cha-ching $$$

The browsing activity looks, feel and checks out as real because it is… So this stuff is virtually impossible to detect. They make a few dollars per click easily. Somebody working a regular 9 – 5  day clicking around can make thousands.

These click fraudster guys even own premium domains… Domains which aren’t that suspicious to be receiving some traffic, but they crank things  up 100x and send 1000s of clicks to it. Once again, domain parking companies do nothing… They are happy and all about it. They are making $$$ as is Yahoo, the traffic broker and middleman. The advertisers are the ones getting fucked in the ass, big time!

The domain industry as a whole is hated by pretty much all search engine marketers for this very reason… Because thanks to wreckless domain parking companies, everybody has to suffer.

Now guys like Frank Schilling or Scott Day who have private feeds with Yahoo are OK. Their traffic quality is A++ but the rest of the industry…. Whole different story. Even though the clicks look and feel real…. They simply do not convert.

So WTF do I know about PPC and click fraud anyways you are wondering? Well, I have been the accounts supervisor with Maxxximize.com for close to 3 years now. I get to see 1000s of fake applications for our domain monetization service each and every month. These assholes have captcha breakers, and send applications time and time over and over again. They do not stop.

I’ve also had multiple run-ins with click fraudsters looking to buy parking accounts from me. I even had one PayPal $5000 to me in exchange for 4 to 5 accounts… I never gave him anything, just gamed him. Was very interesting to get into his mind and have a full blown dialogue into their operations, etc. This was probably a year or two ago.

When they didn’t get the accounts as promised, they did a chargeback but when I mentioned I’d blow their cover or get lawyers involved… They closed the dispute and said “sorry, please do not do this… and you will not hear from us again” and of course, I have not.

Now don’t think of click fraudsters as Chinese or Russian hackers… Because not all of them are. I know of a few youngsters, your typical American teen-agers who are all about tech shit who make $100s per day however they can.

They basically drive around in highly populated areas looking for open wifi connections. Once they get into one, the click fraud begins. They visit one of their parked domains and click away. The browsers they use aren’t your typical browser… It spoofs the client, version, etc. Basically randomizes it, so you are never leaving any footprints. They drive around for a few hours once or twice per week and they make $1000s collectively. Not bad…

Then there are mailing lists and private forums for people who request favors in the form of clicks… Basically, a click trading market of sort. These people make $50 – $100 max and really at the bottom of the chain. Most of these are 40,50,60 year olds that aren’t very tech savvy but they have found a way to exploit the domain parking system and they do just that. It’s easy money. 10 or 20 clicks per day, only takes 5 to 10 mins and they make enough cash.

There are many other things going on out there which you have absolutely no clue about and you never will unless you open your eyes and start demanding answers. The domain parking biz is full of so many problems… Man oh man… I got out back in 2005 because it wasn’t something I could rely on. It’s just a nasty business with no transparency and way too much bullshit going on.

If I was responsible for syndicated / partners PPC over at Yahoo or Google I’d get rid of the public and open-to-all domain parking channels / companies the first day on the job. They are really fucking toxic…. T-O-X-I-C.