Monday, November 27, 2006

Ways Around Click Fraud?

Click fraud is getting a lot of attention in the mainstream press. The Economist had an interesting article this week on the problem, suggesting that it could be the number one threat to Google's market capitalization moving forward. Google's engineers are quoted glibbly proclaiming that "they're having a lot of fun" keeping up with the fraudsters. This attitude is probably not appreciated by the folks buying the adwords or banners.

I've talked to a bunch of online marketers about where this is headed, and I've heard some really interesting ideas (one of which is mentioned in the Economist article.)

1. Begin tying pay-per-click back to some more concrete pipeline metric. The problem with comping search vendors on clicks is akin to compensating B2B marketers on leads (with no strings attached.) Smart B2B marketers demand to be measured further up the pipeline--for example to qualified leads or even to closed deals. The added credibility of "real revenue" far outweighs the potential for "the incompetence of the sales force" or other such drivel. Marketers / search engines should start thinking of ways to pay little for clicks and a lot more for qualified leads or even wins. This takes better systems, sure--but Google should have no problem with this. Witness the ease with which they've been able to get people signed up for Adsense!

2. Begin thinking about impressions as well as clicks because of the attitudinal component. Google could get around the clicks issue largely by starting to look at unique served impressions across some segmentation--the idea that Google isn't just in the business of filling the pipe but also in the business of changing impressions. Even if someone doesn't click on it, if Oracle comes up everytime someone does a database search, that's gotta have an effect on attitudes (if anyone knows of research showing this, we'd love to hear about it.) This gets around click fraud because Google could start looking at research-driven test / controls--essentially changing the game.

3. Just keep going with the arms race. Hackers are constantly thinking up new ways to fool Google on what makes a legitimate click, and of course Google "has fun" responding. Not getting into all of the specifics, the danger is that Google will eventually start cutting into more and more legitimate clicks--which will harm their revenue streams and also the reputation of search and online advertising in general over the long haul. All of this is statistical or algorithmic in nature--thus not perfect. If we've learned anything from years and years of Microsoft / hacker battles, there's no sure fix for anything like this. Unfortunately, this option is both most likely in the near term and also least likely to be effective.

For those of you interested in the original article in the Economist, you have to be a subscriber or view a short advertisement for a day pass, but here's the link.

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