Yahoo has announced several steps it has taken to beef up its click fraud detection and prevention efforts today, including an executive-level appointment focusing on marketplace quality and publicly disclosing for the first time the portion of invalid clicks it filters out before advertisers are billed for them.

Reggie Davis, who has served as an attorney for Yahoo for the past seven years, has been named the company's new VP of marketplace quality. His most recent role was as associate general counsel managing litigation, including Yahoo's click fraud litigation. Davis is based in Burbank, Calif., and will operate within the marketing products division of Yahoo's recently-formed Advertiser & Publisher Group, led by Susan Decker.

"This is an opportunity for me to get into an area where we've shown leadership in the past, and expect to continue to show leadership in going forward," Davis said. "I'm especially excited by the commitment of resources. Previously, I've seen a disconnect between how hard the company is working on these issues and outsiders' perception. Now we can help remedy that."

Davis will be given resources to hire a dedicated staff to focus marketplace quality efforts across several product and click protection teams, which are currently operating independently. His team will focus on click fraud, traffic quality, network placement and other marketplace quality issues, including working closely with advertisers and publishers on quality-related matters.

John Slade, senior director of product management for Yahoo Search Marketing, had previously split his time between building the Panama platform and managing clickthrough protection issues. Now that Panama is complete, and Davis is taking over these duties, Slade will move into a role where he can focus full-time on building Yahoo's next-generation of search and display advertising products.

Davis' role will be similar in some respects to that of Google's Shuman Ghosemajumder, business product manager for Trust & Safety at Google. Ghosemajumder has been the voice of Google's click fraud prevention efforts at industry conferences and in the media, and leads the Click Quality Team at Google.

Davis will have operational, reporting, and communications functions within his role, as well as strategic and tactical ones. He will begin by driving the consolidation of several existing quality efforts at Yahoo, and creating new teams to address network quality issues.

Click Fraud by the Numbers

Earlier this month, Google revealed specific data on invalid clicks in its AdWords system. He also announced several planned click-fraud-related initiatives, including IP Filtering capabilities for advertisers, enhanced invalid click reports, educational initiatives, and an improved reporting format.

Ghosemajumder said that invalid clicks on Google AdWords ads have consistently remained under the 10-percent mark, and are generally in low single-digits. In addition, the amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent, according to Ghosemajumder.

Today, Davis revealed that Yahoo's "network discard rate," representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent. He pointed out that this is an aggregate figure, so advertisers should not assume their own discard rate is in this range, but only that the overall average of all advertisers falls into this range.

That number is in line with third-party estimates of click fraud, and reflects Yahoo's aggressiveness in protecting advertisers from click fraud and other clicks that Yahoo thinks should not be billed to advertisers, Davis said.

"It shows the level of our robust clickthrough protection methods, and shows the commitment by Yahoo to be an industry leader, and to dedicate resources to these issues," he said.

While it's heartening to see an increase in transparency from both Google and Yahoo, advertisers should be wary of getting a false sense of security from these kinds of numbers, according to Tom Cuthbert, president and CEO of click fraud monitoring firm Click Forensics.

"They are meaningful because less than a year ago [Google CEO] Eric Schmidt told people click fraud was 'not a material issue.' These moves clearly show click fraud is meaningful, especially to advertisers. But these numbers certainly don't tell the whole story," he said. "We believe Yahoo is taking a more honest approach than others in dealing with the issue of click fraud. But the truth is no advertisers can be sure these figures are accurate without the involvement of a third-party auditing service like there is in other mature media industries, such as television and radio."

Advertisers have been pushing both Google and Yahoo for a stronger focus in this area for years. Earlier this year, Jeffrey Rohrs enumerated 11 specific requests to pay-per-click network providers in his "Sausage Manifesto."

More Anti-Click Fraud Efforts Ahead

Davis also stressed the importance of addressing advertiser concerns about click fraud, which Yahoo has done in the past and will continue to do. He said the improved geo-targeting controls in the new Panama platform, which help advertisers block traffic from countries where they believe invalid clicks are originating, were one of the top requests from advertisers.

The next two most frequent requests were for discounted pricing of certain types of traffic and domain-blocking capabilities, both of which are in the works and expected to be released to advertisers in coming months. Quality-based pricing will aim to price traffic in a manner that is consistent with the quality it delivers to advertisers, so traffic will be priced at different tiers. Domain-level blocking will allow advertisers to identify individual domains from which they do not wish to receive traffic.

Yahoo is also working on building automated advertiser inquiry submission processes, and providing greater detail around advertiser and publisher adjustments, he said. An "ad marketplace quality council" of advertisers is being formed, to help Yahoo better address advertiser and publisher concerns, and an online traffic quality center will be launched soon to provide a one-stop shop for click fraud-related information, he said.

Disclosing individual advertiser discard rates is not something that many advertisers are asking for, according to Davis, but it is something his team is considering. He stressed the need to balance disclosure with preventing fraudsters from getting too much data that would enable them to game the system.

Cuthbert said these efforts are helpful, as long as Google and Yahoo continue in the same direction, both in search and content networks. "Advertisers are looking to ensure they get what they pay for. These programs help but don't address more critical issues such as easing the submission process, reconciliation and third party audits," he said.

Davis said that Yahoo is indeed planning on continuing down the path it has undertaken. "We're focused on the concerns of our advertisers. We're really committed to providing visibility, control, and transparency on behalf of our advertisers. We want to put them in a position to ensure they'll be getting quality traffic," he said.