What is Pay-Per-Click Advertising (PPC) Click Fraud?
Search engines offer advertising programs in which advertisers' text ads appear beside search results on the page when a searcher initiates a search query. These text advertisements are called “Pay-Per-Click” ads, because advertisers are charged only when those ads are clicked by visitors.
PPC Click fraud occurs when ads are clicked on illegitimately by a person or by software with no intention of purchasing anything from the advertiser. Those clicks are of no benefit to an advertiser and since each click costs them money, every click is taking money from their bottom line and robbing them of their advertising budget.
In March of 2004, federal authorities arrested a California man for allegedly trying to blackmail Google into paying him money not to distribute software he called “Google Clique” that he claimed would allow spammers to generate millions of dollars worth of fraudulent clicks.
Google shares money with web site publishers who display their ads on content sites. In November of last year, Google sued a Texas based company called Auctions Expert International, claiming they were defrauding them and Adwords advertisers by clicking on PPC ads displayed on their own site in order to generate income.
Now Google, along with nine other named PPC companies, are being sued by an Arkansas based collectibles retailer for allowing click fraud to continue, even after Google's Chief Financial Officer, George Reyes said last December, "I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model"
Reyes has also been quoted saying, "There's a lot of bad guys out there that are trying to take advantage of this and it costs, I'm sure not just us, but eBay and Yahoo! and Amazon and the whole crowd, you know, tons of money." In it's IPO filing with the SEC last year, Google noted that it had a problem with fraudulent clicks on the Adwords network, and pointed out that it routinely paid refunds to advertisers who were victims of click fraud. |
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