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April 6, 2005

Click Fraud Comes Home To Roost

Via SearchBlog.

News is breaking about a class action lawsuit (filed in February 2005) accusing most of the major PPC (pay-per-click) providers of charging advertisers for traffic that did not include actual customers (i.e. fraudulent clicks).

The lawsuit, led by online retailer Lane's Gifts and Collectibles out of Texarkana, Arkansas, could spell trouble for several major search engines, many of whose revenues are almost entirely dependent on PPC. Senior executives from Google have acknowledged in the past that click fraud poses a major threat not only to Google's business model, but to the Internet economy as a whole.

Considering how long click fraud's been a serious and frequently discussed issue for the SEO and PPC advertiser community, it's a tad surprising that Google (and others) let it get to this level without addressing it. In many ways, this is a testament to just how tricky click fraud can be for PPC providers to detect and prevent.

As reported in BusinessWeek.com, defendants include Yahoo! Inc., Overture Services Inc., Time Warner Inc., America Online Inc., Netscape Communications Corp., Ask Jeeves Inc., Buena Vista Internet Group doing business as Go.Com, Google Inc., Lycos Inc., Looksmart Ltd. and Findwhat.com Inc.

Nick at ThreadWatch also touches on it here.

I recently co-authored a comprehensive guide to click fraud, where it comes from, and ways to detect and prevent it. It's available to current subscribers to SearchEngineNews.com, who can access it by clicking the following link:

Solving The Click-Fraud Conundrum

If you're not a subscriber, you can sign up here.

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