Click Fraud - Threatening the Internet Economy

<h1>Click Fraud - Threatening the Internet Economy</h1>Author: <a title="Ross Maciver" href="http://www.articlesbase.com/authors/ross-maciver/1197.htm">Ross Maciver</a> One of the most popular forms of Internet advertising is
pay-per-click (PPC). Merchants place ads with search engines
like Google or MSN and the ad appears whenever someone enters a
relevant search. 
If the ad is clicked the merchant pays a fee - anywhere from 5
cents to $100. It's a fabulous idea - ad campaigns targeted at
your most likely customers.
It's such a fabulous idea that Google, the king of PPC, grossed
$1.24 billion in the first 3 months of this year - most of it
from advertising revenue.
Watch out, though. There's trouble in PPC land. The flip side to
PPC is a phenomenon called "click fraud" or "click spam."
There are two types of click fraud. The first type occurs when
someone maliciously clicks on your PPC ad to drive up your
advertising costs. It could be a competitor or a disgruntled
former employee.
The second type of fraud involves clicking on affiliate ads to
generate income. Affiliate ads are placed on third party web
sites and each time someone clicks on an affiliate ad the web
site owner receives a commission.
Industry observers believe that affiliate click fraud is the
biggest problem of the two. Either way, the result is the same -
advertising budget depletion with little gain for the merchant.
Either type of click fraud can be accomplished with the use of
automated "robots" or by hiring an army of workers. The India
Times reported in 2004 that a "growing number of housewives,
college graduates, and even working professionals across
metropolitan cities are rushing to click paid Internet ads to
make $100 to $200 per month."
How serious is the problem? It's hard to judge exactly, but
click fraud is commonly estimated at 20% to 35% of all PPC ad
campaigns.
A recently launched lawsuit alleges that Google is aware of the
magnitude of click fraud and does not do enough to alert
advertisers of the problem.
The class action suit launched by <a
href="http://www.clickdefense.com/">Click Defence</a> says that
"Google has an inherent conflict of interest in preventing click
fraud since it derives the same amount of income from each
fraudulent click as it does from each legitimate click." The $10
million lawsuit quotes Google Chief Financial Officer George
Reyes as saying that click fraud is "the biggest threat to the
Internet economy."
Click Defense is a Colorado company specializing in click fraud
detection. They claim that they themselves became a victim of
click fraud when they advertised with Google's Adwords program
this year. 
They are seeking damages for breach of contract, negligence,
unjust enrichment, and unfair business practices. 
A Google spokesman said that the case is unmerited and that
Google will defend itself "vigorously.
About the Author: Copyright 2005 by Ross MacIver

This article may be redistributed freely on the Internet or in
ezines as long as the resource box and hyperlinks remain intact.

Ross MacIver is the director of Best Online
Content</a>. We provide quality content for your web site and
offer a full range of design and SEO services.Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/advertising-articles/click-fraud-threatening-the-internet-economy-281.html" title="Click Fraud - Threatening the Internet Economy">Click Fraud - Threatening the Internet Economy</a>

One of the most popular forms of Internet advertising is pay-per-click (PPC). Merchants place ads with search engines like Google or MSN and the ad appears whenever someone enters a relevant search.

If the ad is clicked the merchant pays a fee - anywhere from 5 cents to $100. It's a fabulous idea - ad campaigns targeted at your most likely customers.

It's such a fabulous idea that Google, the king of PPC, grossed $1.24 billion in the first 3 months of this year - most of it from advertising revenue.

Watch out, though. There's trouble in PPC land. The flip side to PPC is a phenomenon called "click fraud" or "click spam."

There are two types of click fraud. The first type occurs when someone maliciously clicks on your PPC ad to drive up your advertising costs. It could be a competitor or a disgruntled former employee.

The second type of fraud involves clicking on affiliate ads to generate income. Affiliate ads are placed on third party web sites and each time someone clicks on an affiliate ad the web site owner receives a commission.

Industry observers believe that affiliate click fraud is the biggest problem of the two. Either way, the result is the same - advertising budget depletion with little gain for the merchant.

Either type of click fraud can be accomplished with the use of automated "robots" or by hiring an army of workers. The India Times reported in 2004 that a "growing number of housewives, college graduates, and even working professionals across metropolitan cities are rushing to click paid Internet ads to make $100 to $200 per month."

How serious is the problem? It's hard to judge exactly, but click fraud is commonly estimated at 20% to 35% of all PPC ad campaigns.

A recently launched lawsuit alleges that Google is aware of the magnitude of click fraud and does not do enough to alert advertisers of the problem.

The class action suit launched by Click Defence says that "Google has an inherent conflict of interest in preventing click fraud since it derives the same amount of income from each fraudulent click as it does from each legitimate click." The $10 million lawsuit quotes Google Chief Financial Officer George Reyes as saying that click fraud is "the biggest threat to the Internet economy."

Click Defense is a Colorado company specializing in click fraud detection. They claim that they themselves became a victim of click fraud when they advertised with Google's Adwords program this year.

They are seeking damages for breach of contract, negligence, unjust enrichment, and unfair business practices.

A Google spokesman said that the case is unmerited and that Google will defend itself "vigorously.

Copyright 2005 by Ross MacIver This article may be redistributed freely on the Internet or in ezines as long as the resource box and hyperlinks remain intact. Ross MacIver is the director of Best Online Content. We provide quality content for your web site and offer a full range of design and SEO services.

Rate this Article:

0 / 5 stars - 0 vote(s)

Re-Publish

Related Videos
Related Articles
Ask / Related Q&A

Play

Learn about Pay Per Click Advertising - Part 2/2

Play

Learn about Pay Per Click Advertising - Part 1/2

Play

How to Create Word or Tag Clouds with Wordle

Play

Gmail Made Safer

Play

How to search with Xippee

Article Source: http://www.articlesbase.com/advertising-articles/click-fraud-threatening-the-internet-economy-281.html

Article Tags: Internet, Advertising, MSN, Google, Ppc, Search, Ads, Merchants, Merchant, Place, Popular, Forms, Appears, Pays, Is Pay-per-click, Engines Like, Enters, A Relevant, Clicked

Latest Advertising Articles
More from Ross Maciver

Alternative Advertising Campaigns Doing the Impossible: Reaching Mothers

By: Jeff R. Lamb | 09/07/2009
Mothers are one of the most difficult demographics to reach through advertising. However, clever use of alternative advertising techniques can reach mothers wherever the go.

How Can I Print Personal Letterheads And Stationeries Easily?

By: Kate | 09/07/2009
It is easy to print personal letterheads and business stationeries. However, letterhead printing or stationery printing can still become easier if you just adjust some of your printing options and designs.

Take The Free Course On German Shepherd Grooming

By: Frankie Comer | 09/07/2009
Many folks may not know this, but the German Shepherd essentially has two layers of fur to protect its body. And it is surprisingly better to take care of than anticipated. The first layer of the covering which is near to the body is close-knit and soft. It provides the German Shepherd with protection, acting as a thermal coat to maintain heat during colder months and protects it from the harmful rays of the sun in the warm seasons. There are numerous good books and internet ...

Benefits of Bulk SMS Solutions

By: Prakashnet | 09/07/2009
SMS has gained popularity in the recent past century and the companies seeing the popularity of SMS, they use SMS for marketing their products and services.

Free Online Course On Golden Retriever Grooming

By: Case Gold | 09/07/2009
Golden Retriever's do need basic grooming. Goldens are a double coated breed. They lost, but some basic upkeep will seriously cut the amount of hair you find across the house. The Golden Retriever's double coat is designed to protect them during any season. Throughout the winter, the undercoat grows to protect them from the cold. As the weather warms, the undercoat sheds as the Golden no longer wants it. Regular brushing with a quality bristle brush, along with regular use of...

Environmentally Responsible Advertising

By: Lenora Degen | 09/07/2009
Banners are cost effective advertising solutions. But the Vinyl PVC they are made of is not healthy for the planet, in its manufacture and in its disposal. Fortune Displays in Colorado offers beautiful, functional alternatives to PVC banners.

How to Make a Lasting Appeal with your Color Brochures

By: karen grahams | 08/07/2009
You must always aim for that lasting appeal in your color brochures. Never design your custom brochures just to give information. Your readers must be encouraged to understand your color brochures and they must be able to remember its message quite clearly. Being memorable is really the name of the game here since this is how you can influence them to take the appropriate action given the content of your custom brochures.

Starting Your Own Business From home Is Exciting and Lucrative

By: Morgan Fletcher | 08/07/2009
Starting your own business from home is probably much easier than most of the think. With technology that we have at our fingertips today you can start your own business from home with not more than a computer and a cell phone. Oh wait... You actually do not even need a phone anymore. Programs like Skype and even twitter make online communication with buyers fun and straightforward. of folks making gift baskets, candles, decorations and all sorts of junk to sell o...