“We have said for some time that we believe we manage the problem of invalid clicks very well. By far, most invalid clicks are caught by our automatic filters and discarded before they reach an advertiser’s bill. And for the clicks that are not caught in advance, advertisers can notify Google and ask for reimbursement.”

Nicole Wong, associate general counsel for Google.

Red Herring is one of many covering the story: http://www.redherring.com/Article.aspx?a=16020&hed=Google+Click+Fraud+Settlement&sector=Industries&subsector=InternetAndServices

Amongst other things Carol Krol from B2B Online states: “According to data released in December by the nonprofit Search Engine Marketing Professional Organization, the number of those who believe it is a serious issue has tripled in the past year, and two out of five advertisers and about 40% of the agencies surveyed have tracked fraud in pay-per-click campaigns.”

Read the rest of Carol’s article here http://www.btobonline.com/article.cms?articleId=27207

My reply: It’s true. I do not have statistics because we do not run Google Adword campaigns. But others do. As John Slade (leader of Yahoo’s click fraud protection effort) points out:

“If you’d told me five years ago that I would be talking about ‘fake clicks,’ I would have told you that you were crazy. Now it’s all I spend my time on.”

In a recent article in Wired there was also an interesting comment : “Bill Gross, the man who invented PPC back in the late ’90s when he presided over the startup incubator Idealab, has argued that, despite the cleverness of the various methods used to fight it, click fraud will continue to cast a shadow over PPC advertising. Ultimately, he believes, advertisers will switch to another model, which he calls cost-per-action.”

Cost per action IS an area that altex recomends and one that I have advocated all my ‘internet career’.

Priit also said: But even so the point is the price of the client not the click and this means that the price will just factor in any fraud or other irregularities and the end result will be the same as without fraud.

My reply: Yes, in my original post I say that people should factor in fraud. Also I agree there IS a place for pay/per/click (test conversion ratios, short term promotion, strategic words when SEO is not an option- for various technical/legal/competitive reasons). I just want people to be aware of click fraud and judge the importance for themselves. In my experience click fraud leads to a distortion of statistics which can negatively influence other search marketing strategy decisions.

Not everyone measures click stream activity on their site (post click visitor-to-action analysis) so they do not necessarily know which search terms are producing end clients. Also when the purpose of the campaign is branding post click analysis is rarely studied - although yes it should be.

Further Priit comments on this subject can be found on his blog (Estonian language) .

PS As Priit says, we have discussed this subject before but he can’t see the problem with click fraud.