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Does Click Fraud Signal Demise Of CPC?

The furor in the marketing community surrounding click fraud highlights one of the great myths of the first decade of online activity, writes Richard Waters in the Financial Times. Namely, that the click is the ultimate measure of intent on the Internet. To click is to cast a vote, express your desire to buy, or mark a prelude to greater action. We now know there are more efficient ways to capture user intent. Waters says that means "the next wave of successful Web companies will be the ones that capture those new techniques first--and there is no guarantee that it will be the ones who dominate in the cost-per-click world." The belief that clicking a mouse is tantamount to intent is inherently flawed, he says, and click fraud is perhaps the greatest indicator. A court-ordered report from a New York University professor has revealed that Google's efforts to address the click fraud problem are "reasonable." All we can do, however, is take his word for it. Why? Because to get into the how and why would be to learn Google's secret recipe for search success. That's something it doesn't want its competitors or click fraudsters to see. The lack of control is incredibly frustrating for advertisers, but the pay-per-click model remains successful, so they have to grudgingly take the word of Google and its court-ordered professor. Google, for its part, is experimenting with new ad systems, such as cost-per-action and cost-per-thousand, where advertisers pay for audience size. But Google is only beginning in these areas. There is no guarantee that a narrowly focused search startup won't take the lead.

Read the whole story at Financial Times »

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