• San Jose Mercury News, Tuesday, April 18, 2006 10:36 AM

It's been said before and it'll be said again and again, until, perhaps, some kind of legislation is put into effect to protect advertisers: click fraud is not going away. We can only wonder how Google and Yahoo feel about the issue, which threatens the very core of their business model. For those that don't know, click fraud most often occurs when a competing advertiser uses an automated program to relentlessly compose search queries whereby they click on a competitor's text ad, until they shore up their competitor's AdWords budget, effectively wasting it.   It also occurs when AdSense publishers, who stand to benefit from ads that are clicked-on on their site, use similar programs to click on ads shown on their site. Again, advertiser money is wasted, but this time Google and the publisher benefit. What happens if this becomes rampant enough to comprise, say, half of all pay-per-click traffic? Well, advertisers would lose confidence and flee, effectively crushing the search marketing industry. The problem is there's currently no reliable evidence surrounding the click fraud issue, so nobody really knows how bad it is. Both Google and Yahoo downplay the severity of the problem, but advertisers certainly won't relax on their word. They benefit from understatement, while third-party click fraud auditors--which say the problem is upwards of 30 percent of all clicks--obviously benefit from overstatement, as the search providers point out. None of this helps advertisers. Both companies tell the San Jose Mercury News they are considering whether to release more information and might be willing to accept third-party audits--but they are unlikely to share substantial information voluntarily, unless their advertisers, perhaps, force them to.  

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