Click Forensics Traffic Quality Management

Tom Cuthbert, President & FounderTom Charvet, Vice President &

Founder

IEEE

March 19, 2009

Agenda

• About • Company Background• The Problem of Click Fraud• Our Approach• Technical Overview

– EDUCATION:· Attended M.I.T. · BSEE with Highest Honors, Georgia Tech· MSEE, Southern Methodist University· Ph.D. in Electrical Engineering, S.M.U.

– PUBLICATIONS:· Circuit Design Using Personal Computers· Optimization Using Personal Computers Applications for Electrical Networks· Broadband Direct-Coupled and Matching RF Networks· Four articles, RF Design, 1994, 1997, 2000· One article, IEEE Trans. Microwave Thy. Tech. Newsletter· One article, Applied Microwave and Wireless· Paper and presentation, IEEE International Symposium on Circuits and Systems

– EXPERTISE· Design &Synthesis of Electrical Filters &Impedance-Matching RF Networks· Amplifier Design by Geometric Model and Mapping· Electronic Circuits in Frequency Ranges from VLF through K Bands· Optimization (Nonlinear Programming)· Numerical Methods and Analysis

– JOINED IEEE IN 1958, LIFE MEMBER

Tom Cuthbert

About the “Tom’s”

• Tom Charvet

• Tom Cuthbert

• The company

• How we got here…

It’s Google’s World…

Click Fraud is like spam…

• Spam was up 25% in 2008• When McColo went offline in November,

the rate dropped 70%, it’s up 156% since• An unprotected user would have received

45,000 spam emails in 2008• Virus volume increased 6X in 2nd half ’08• Spammers have reinvested and are

constantly evolving their efforts

…and spam is getting worse

How Click Fraud Works

• Methods– Individual– Click farms– Bot and botnet

• Motivations– Competitive– Malicious– Financial

Types of Traffic Quality

ClickFraud

Valid Traffic

OtherInvalidTraffic Invalid Traffic

Likelihoodof

Conversion

Low

High

Valid Traffic

Invalid Traffic

Click Click TypeType

CharacteristicsCharacteristics

Click Bots Programmed for low frequency repeat clicking

Click Farms

Humans coached to use proxies and clean cookies

Competitors

Business & Keyword competitors

Internal Own & Partner clicks

Search Bots

Valid Bots that don’t properly identify themselves

Invalid Click Detection

Q4 2008 Quarterly Stats

Click Fraud Index™

© 2009 Click Forensics, Inc.

Overall Click Fraud Rate by Quarter

© 2009 Click Forensics, Inc.

Content Network Click Fraud Rate %

© 2009 Click Forensics, Inc.

Botnet Click Fraud Rate by Quarter

How We Do What We Do

Who We Help

• Buy Side - Advertisers

• Sell Side – Search Engines, Publishers, and Ad Networks

The Buy Side

Invalid Traffic Is MoreThan Just Click Fraud

Low Quality

Click FraudClick Fraud

Invalid Traffic

Types of Low Traffic Quality Reason

• Low conversion rates

• CPA too high

• Broad match conflict• Outside target service area

• Competitor Clicks

• Unacceptable type of site (MFA, Adult, etc.)

• Malicious intent• Click Farms• Bots/Botnets

CONFIDENTIAL 18

Five Major Threats To ROAS In CPC Campaigns

1. Like spam, bots and botnets are becoming more sophisticated and difficult to catch

2. Over 70% of all sites in Google Adsense and the Yahoo Publisher Network are made for ad sites or parked domains

3. Over 22% of all invalid activity comes from outside the targeted geo area of advertisers

4. Competitor clicks deplete ad spend

5. Brand infringement violations use established brands to send customers to competitor’s sites

Competitors Click On Ads

CONFIDENTIAL 20

Clicks Are Coming From China…

CONFIDENTIAL 21

CONFIDENTIAL 22

Your brand is sending traffic to your competitors

Fully Automated Click Tracking Reconciliation

• FACTr completely automates the submission process of invalid campaign activity evidence

• The evidence report is a verifiable third-party audit containing a click-for-click breakdown of invalid activity

• Google, Yahoo, Looksmart and Miva are partners in this program with more to be announced soon

CONFIDENTIAL 23

FACTr™

Case Study:Click Forensics 6-Month ROI

45% reduction in invalid clicks Over $200k monthly savings Eliminated very expensive, low-quality clicks FACTr process produced credits for exceptions (>$100k/mo)

7% increase in conversion rates

FACTr

The Sell Side

Traffic Segmentation

Click Fraud

• Traffic to Discard

1000

0

Marginal

Best

• Route Traffic Most Effectively

• Maximize Earnings Potential

Reading the Scoreboard

ClickScore - A three digit score that indicates whether a click is valid or invalid and serves as a predictor of conversion .

VisitorScore - A three digit score produced by each individual visitor. Represents the quality of visitor.

SiteScore™ - A three digit score that represents the traffic quality of an individual publisher or network.

Click Forensics 2008

Primary goal is to supply high quality traffic to advertisers from publishers to maximize revenue

Ad Network

Click Forensics 2008

Click Forensics measures the quality of traffic from publishers and report the results

Ad Network

Click Forensics 2008

Click Forensics augments existing blocking mechanisms that eliminates the poor quality visitors from viewing ads

Ad Network

Click Forensics 2008

The result is higher quality impressions and more valuable clicks delivered upstream

Ad Network

Click Forensics 2008

Standard

Discard

Premium

Reporting Tools

• View the SiteScores™ of the publishers in your network

• Monitor the VisitorScores™ of your worst offenders

• Gain insight into the geographic areas delivering high and low quality traffic

• Analyze trends within your traffic

• Export data into other applications for added analysis

• Setup near real time email alerts to monitor spikes in unwanted traffic

• Drill down for publisher and advertiser dispute resolution

Click Forensics 2008

Data Flow Diagram

Raw click data – transmitted via scp, sftp, or ftps. This can be scheduled near real time.

Ad Network

The Click Forensics API returns:

• Valid and Invalid Clicks and their ClickScores™• High threat visitors and their VisitorScores™• Publisher quality index and their SiteScores™• Known Offender Lists

Each click is rated and assigned a ClickScore™

Each visitor is rated and assigned a VisitorScore™

Each publisher is rated and assigned a SiteScore™

Click Forensics 2008

Putting It All To Work

• Blocking - Invalid traffic can be blocked before it ever reaches an advertiser

• Routing - Ad networks can route traffic appropriately to maximize earnings

• Intelligent Pricing – Traffic segmentation allows for quality-based pricing models

• Publisher/Advertiser Review - Ad Assurance automates the process for detecting malware in ad creative and sites.

• Reconciliation - Evidence of invalid traffic is recorded so that ad networks can reconcile payment with both publishers and advertisers

Thanks!

Q & A