The press was all abuzz recently with a report released by California-based online research company Outsell. The report was based on a survey conducted in May. Its findings have some very painful implications for your search engine marketing budget.
One of the first important articles I wrote for SEO Chat covered click fraud. A year and a half later, two search engines (Google and Yahoo) settled click fraud class action lawsuits, but the problem is still with us, and shows no sign of going away. That’s just a small part of what Outsell is telling us with the results of its survey.
As I mentioned, the company conducted the survey in May. More than 400 online advertisers responded, with yearly advertising budgets ranging from several thousand dollars to more than $10 million. Together, these advertisers control about $1 billion per year of online advertising money.
That might seem like a drop in the bucket for more conventional advertising, but for Internet advertising, it’s a very significant fraction of a growing field. According to research firm eMarketer, this market was worth $10 billion in 2005 and will be worth more than $15 billion in 2006. Google and Yahoo together will capture nearly half of that market. So Outsell’s study examines the online marketing experiences, monetarily speaking, of about ten percent of the customers. Outsell describes those who responded to the survey as a representative cross section.
So what did Outsell find in its survey? According to some figures, it found a $1.3 billion problem with click fraud. While there have been percentage estimates of the problem before, few actually put a dollar amount on it. And how did Outsell come up with that figure? Apparently, all it did was apply simple math to the results of its survey.
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