Is pay-per-click viable in the long term?
My posting Don't panic: what to do if Google suspends your AdSense account has started a long conversation between Greg S. and myself on the long-term viability of pay-per-click (or, as Greg more accurately puts it, pay-per-performance) advertising in the face of rampant click fraud. I'd love to hear what others have to say about it, especially any advertisers out there, the ones who ultimately pay for click fraud in the end.
Some people have argued that a certain level of click fraud is normal and that the prices in the system adjust themselves automatically to handle fraud. In other words, if it's “known” that 10% of clicks are fradulent, advertisers bid less on the keywords so they spend the same money. Some have even argued that not all click fraud is wasted money, since if the click fraud is committed by human means (in other words, someone is clicking ads) then the ads are still making a fleeting impression. (I can't see how automated click fraud can be seen as anything but fraud, though.)
Whether it's good for the advertisers or not, click fraud is not something I welcome myself. I now have to burn through $620 in chargebacks to my AdSense account due to click fraud before I see any further money from Google after this month's earnings cheque arrives. Google managed to shut the fraudsters down with the information they provided, but it still left me with a sour taste. But these are the things you face when you're running a business — and don't mistake it, you are running a business if you've got AdSense on your site.
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