Pay-per-click and click fraud

In a comment left in one my previous blog entries, a visitor named Greg had this to say:

From a technical standpoint, it surprises me that Google, having the engineering/technical expertise that they do, would base the vast majority of their revenue on a model that is so vulnerable to click fraud. But some people seem to think that despite click fraud, the model is good because it is more inherently “trackable” than, say, print or broadcast ads.

Personally, I would like to see something like fixed fees adopted, which provides no incentive for anyone to engage in performance-oriented fraudulent activities, while preserving the “trackability” of the ads. But some people are opposed to fixed fees because they don't want to pay for under- (or no) exposure to their ads, even if it would vastly reduce their exposure to click fraud.

While I appreciate Greg's faith in my abilities to come up with a good alternative, if I could I'd probably be creating the next Google from it instead of flogging my AdSense book

Seriously, click fraud is a problem for anyone making or spending money in the online advertising arena. Just today my site's been subjected to click fraud yet again — somebody coming along and accessing the homepage at regular intervals and sending my clickthrough rate (CTR) up into the 90% range. All I can do for now is turn off the ads until the fraudsters go away — it seems to take them a while.

The thing is, fraud is not an invention of the Internet age. The Internet merely lowers the barriers for perpetrating fraud. It also makes the fraud that much more impersonal, especially if you're dealing with small amounts (micro-fraud, to go along with micro-payments, which is really what a pay-per-click system is all about). Click fraud is on the same level as illegally downloading music and videos for most people.

Consider newspapers and other periodicals. This statement from the Audit Bureau of Circulations website says it all:

At the turn of the 20th century, publishers fought a fiercely competitive battle. Using circulation figures as weapons, publishers won advertising dollars by flooding the marketplace with false and misleading circulation claims. With little recourse, advertisers were forced to buy advertising based on exaggerated and unrealistic circulation information.

As you can see, the problems we face with click fraud or even impression fraud are not new, just recast in a new light to take advantage of new technologies.

In the end we may end up with a system like ABC to police online advertising. Right now as an AdSense publisher you're basically looking to Google to act as its own auditor. Some say that places Google in a conflict of interest, since its revenue depends on advertising. And I'd have to agree. But there's not much we as small, individual AdSense publishers can do about it. All we can do is be vigilant and report click fraud whenever we suspect it.

Comments