Click Fraud-defined as artificially inflating the advertising bills by generating false clicks- is the new “big” threat to online advertising. Google and Yahoo generate most of their revenues through online advertisements. They will be in great danger if this is the case. While both the companies say that they do not bill the customers or reimburse them for clicks that are fraudulent in nature, the customers feel otherwise.
The biggest problem here is that the clients and the websites can’t seem to agree on a common definition of “click”. The people who advertise feel that they should be only charged for those clicks that have generated revenue. There are many clicks that are generated by their competitors who do so to drive up the bill of the competing firm. Also, there are many website operators who click on the ads on their own sites- sometimes employing computer “Bots” to do the job- so they can put more money in their pockets.
Shuman Ghosemajumdar, Google’s business product manager for trust and safety, wrote in a recent blog: “Our servers can accurately count clicks on ads, but we cannot know what the intent of the clicking user was when they made that click”.
Some consultants says that as much as 30% of all clicks on the web are fraudulent.
Also, advertisers are often charged for ads that don’t fully loads. Companies like PepsiCo, HP and Kimberly-Clar want common measurement standards by 2007.
Yahoo and Google say that they are introducing “new technology” to remove fraudulent clicks. What exactly is this new technology? We dont know! I feel that the revenue generated by these ads are shared by these giants along with many small players who take part to generate those clicks. I seriously wonder if they will bring something efficient enough to remove all those clicks!! Wouldn’t that decrease their income?? Especially Google, that generates almost all its revenue by advertisements, such a step would be detrimental towards its growth. Afterall, the company went public only in 2004……
For a complete picture take a look at the latest issue of Business Week. You can also find this story here
The Sept. 4 issue of Fortune Magazine also talks about this issue in brief.