New Study Finds Click Fraud a Billion Dollar Problem

BURLINGAME, Calif. — According to a new study by market researcher Outsell Inc., click fraud has turned into a $1.3 billion problem. The study found that Internet advertisers paid $800 million for fraudulent clicks, prompting many companies to reduce spending on this method of online advertising.

Click fraud is the practice of charging pay-per-click advertisers for fraudulent clicks. Scammers repetitively click on ads or use bot programs to cause a competitor to be overcharged under the pay-per-click model.

Outsell’s survey was based on “the responses of 407 online advertisers representing a cross-section of U.S. business. Their spending ranged from several thousand dollars online annually to more than $10 million.”

In the study, advertisers say that 14.6 percent of all clicks are fraudulent, and three quarters say it has happened to them at least once. It also found that 27 percent of advertisers curtailed or stopped spending on click-based advertising. Additionally, 10 percent said they intend to limit their spending overall.

“In our opinion, it is not acceptable that advertisers fund the illicit profits of the scammers,” Chuck Richard, vice president of Outsell, said in the report. “Pay per click is a really rudimentary [form of] advertising — a baby step — and it’s destined to decline and be replaced by other advertising methods.”

Recently, companies have sued Google and Yahoo over click fraud allegations, claiming the companies haven’t done enough to combat click fraud aggressively. Yahoo escaped the fate of its rival Google, settling its class-action click fraud case for $5 million in legal fees and promising to institute a variety of anti-click fraud measures. Google settled its case by agreeing to pay $90 million.

Despite widespread findings of click fraud, Outsell’s study shows that overall Internet advertising revenues grew in the U.S. in 2005, pulling in $5.5 billion on pay-per-click ads alone.

Google and Yahoo do not disclose data about click fraud, based on the fear that if the data is made public, scammers could easily circumvent its defense. Richard said the companies should act more transparently to show advertisers they have nothing to hide.

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Utah VPN Rule Enforcement Pause Extended in Aylo Lawsuit

Provisions of a Utah law making adult websites liable if minors in the state circumvent geolocation efforts to bypass age verification, which were set to come into force in May, have again been put on hold temporarily.

Anti-Censorship Bill Could Shield US Sites From Foreign AV Laws

A Republican congressman has introduced legislation to bar U.S. courts from helping to enforce any foreign law restricting speech that would domestically be protected under the First Amendment, potentially including foreign age verification laws.

X3 Expo 2027 All-Stars Unveiled, Dates Set for Jan. 8-9

X3 Expo will make its L.A. LIVE debut at the JW Marriott on Jan. 8-9, bringing together fans and industry insiders for North America’s largest assembly of stars, alongside a dazzling lineup of attractions spotlighting the cutting edge of modern media and pleasure tech.

BranditScan Rolls Out Real-Time Telegram Leak Scans, Takedowns

BranditScan has launched Telegram Bot, a new feature that lets creators scan Telegram in real time for leaked content.

Pineapple Support to Host 'Suicide Survivors' Support Group

Pineapple Support is hosting a free online support group for performers affected by suicide.

Studio Vanniall Signs Exclusive Partnership Deal With PAYSITE

Studio Vanniall has signed an exclusive partnership deal with PAYSITE.

AEBN Publishes Popular Searches by Country for June, July

AEBN has released the list of popular searches from its straight and gay theaters, by country, for June and July.

Appeals Court Upholds Section 230 Immunity in XVideos Case

The U.S. Court of Appeals for the 9th Circuit has upheld a lower court’s ruling that Section 230 protects WebGroup Czech Republic from liability in a case involving user-uploaded CSAM on its tube sites.

Aylo Moves to Settle Two 'Children of Pornhub' Class-Action Lawsuits

Aylo has agreed to terms for a settlement with the plaintiffs in two long-running class actions over allegations that former Pornhub parent company MindGeek knowingly allowed and profited from CSAM on its sites.

Tigerlilly Launches 'SugarCoatedSweethearts' Through PAYSITE

Tigerlilly has launched SugarCoatedSweethearts.com through PAYSITE.

Show More