The Hidden World of Click Fraud - The Search Engines React
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So what are the search engines doing to protect advertisers from fraudulent clicks? Google CEO Eric Schmidt did not help matters when he advocated a market-driven correction, claiming that over time the advertisers will pay less for click throughs as they factor in bad clicks. Advertisers do not seem to be reacting yet.
Other solutions that Google has tried in its efforts to contain click fraud include putting click fraud metrics on advertisers' Adsense accounts. Details about this can be seen on http://adwords.blogspot.com/2006/07/estimating-invalid-clicks.html. It basically tells advertisers what amount of click throughs are believed to be fraudulent, so that advertisers are not charged for said clicks. Google posted percentages of around ten percent, so Outsell Inc's report of 14-21 percent is looking more and more real.
Google claim that the numbers being thrown around by third party consultants are too high, and says that maybe such consultants have a vested interest in making the problem seem bigger than it is. Also its current crackdown on "made for Adsense" sites is encouraging (though it seems as if it punishes the innocent with the guilty).
The other search engines apart from Google help by giving advertisers other options. This will encourage Google to reduce click fraud on Adsense campaigns since the search engine would not want advertisers to move to its competitors for their pay per click campaigns.
Lasting Solutions: Advertisers as Police
The one sure thing about click fraud is that it is only invisible as long as it remains small, but since it is no longer invisible (after all I saw it), I am one of those that are afraid that it is no longer small. Leaving Google to clean up its invalid click detection systems is not feasible for advertisers; they have to police their accounts and go through their logs themselves.
When that becomes unfeasible due to software inability to decipher what came through Adsense, and what came through SERPs or other factors, advertisers may have to hire third parties to investigate the sites which are responsible for large amounts of their Adsense traffic. If they can also ensure that their ads are not hosted by made for Adsense sites, would probably reduce the percentages of invalid clicks. Greedy webmasters who want to fraudulently increase their Adsense income to stratospheric proportions will probably be found out simply due to the scale of the fraud they will perpetrate.
CPA, Renting Text Links and Other Alternatives
In a previous article I had written that advertisers will consider paying for performance through pay per action, the action either being lead generation or sales. All models have their flaws, but Adsense's flaw is too easily exploited.
Hundreds of large sites already advertise simply by buying up space for multimedia adverts or text links on sites which have large numbers of visitors. This trend will increase as advertisers simply shop around for spaces on sites where they will buy space. Also referral networks which pay for performance (like Amazon's associate program) will grow. Online advertising will continue to be a big business, however all bets are off as who will have the biggest share in ten years' time. After all, ten years ago, there was no Adsense.
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