I did a post on click fraud some time back but I want to get back to the topic. Last week, VentureBeat profiled ClickFacts, a company focused on providing more accurate information to brand-owners about who clicks on their on-line ads.

ClickFacts offers a Web-hosted product. It doesn’t manually track the IP addresses of the people who are making the clicks, like many other click-fraud companies do; that doesn’t suffice anymore, because fraudsters are more sophisticated, using programs that cover up their IP addresses. Instead, ClickFacts has developed an analytics program that looks at other variables.

–It looks at customer’s keywords and analyzes which ones have a higher propensity for click-fraud.
–It compares the sites of competing companies, and shows which IP addresses are hitting each of those sites, and tries to assess patterns, such as whether the timing of clicks appear programmed, for example hitting every 3.4 seconds. But it’s also measuring traffic anomolies beyond IP address patterns, to test for “proxy” and others fraud sources.
–It tests for group activity, in case several publishing sites or other people have colluded to click on each other’s sites or other sites.
–It shows which Web sites are consistently seeing lots of clicks on an advertisement, but where those clicks aren’t leading to continued activity within an advertiser’s site.

This is somewhat different from what some of their competitors are doing…

An incumbent player in this area is Optimal iQ, which is owned by ClickForensics, but its approach relies more on reading logs.

Its still not clear though, what brand-owners can do with the data generated by these companies? Can they go back to Google and as for a refund (Apparently Google and Yahoo! only refund 1% of your advertising $$ spend)? As expected Google has come out critically against ClickFacts and its VentureBeat Profile (posted as updates to the story).

Update: Google has responded to this here and here, sending some reports arguing that ClickFacts has counted as fraudulent clicks some clicks that appear benign. It has to do with when users use the back arrow after clicking through to a advertisers page: When you click on a Kodak ad, for example, and land on the Kodak page, and then click on a specific camera there, and then click back to go look at another camera, ClickFacts is wrongly counting that as a bad click.

Update II: ClickFacts has responded, in turn, saying it is surprised Google is bringing this up. ClickFacts fixed this “back arrow” problem in June, after Google first brought it to ClickFact’s attention, Caruso tells VentureBeat. In fact, he showed us a demo that strongly suggests to us ClickFacts is no longer counting those clicks as bad. He said Google’s reports above refer to an analysis of ClickFacts in February, and that Google knows ClickFacts has solved it, and so this should be a moot point. He said he wants to work with Google on other click-fraud matters, too.

The real issue here is that we need a good and universally accepted way to establish the identify of a user. Its a hard problem. Another manifestation of this problem is Digg with SpikeTheVote related issues…There might not be any quick fixes as this might require a very expensive infrastructure solution. Still the importance of solving this problem cannot be overstated. The future of on-line commercial and community activity may depend on it.