Click-fraud - where people deliberately click on web page adverts to drive up revenue - has now been filed as a class-action case (see article in blog). Like all cases these days, you can see their site at LostClicks.com. According to these attorneys, George Reyes, CFO for Google, calls click fraud "the biggest threat to the Internet economy." He really means the Google revenue stream, but he could be forgiven for thinking that which is good for Google is good for the Internet.
The way click-fraud works is that the big adverts suppliers - see the list of plaintiffs for names like Google and Yahoo - have it in their interest to raise the number of clicks on the adverts. It's in their interest, so there are many nefarious and tricky ways to make it so happen. One way is by paying poor students to sit in their dorms and click through adverts, and this is how I was introduced to the subject back in 1997. No doubt the world is much more efficient these days, but it still remains that the party most interested in seeing the adverts click-rate go up is the party that is also collecting the statistics and billing the buyers.
This is a straight-forward governance case involving a straight-forward conflict of interest. What the major web site operators should do is form a cartel or alliance to collect and bill on their behalf. Open the books, purchase an auditor, and pretend for a while to be open. As they don't seem to have done this, they are facing the risk of dramatic and punitive damages for not isolating and clearing their conflict of interests.
(Watching how this evolves is hardly interesting, except to the muggins who purchase banner-ads. But watching how American class-action attornies move through the various frauds of the Internet is apropos, as some of those frauds really need cleaning up.)
Attorneys Seek Advertisers for Click Fraud Class Action
ClickZ News | By Pamela Parker | May 20, 2005
Lawyers engaged in a click fraud-related class action suit against the major search engines have employed a little online marketing of their own.
Dallas attorneys Joel Fineberg, Dean Gresham and Stephen Malouf this week launched a site at LostClicks.com to help them find potential click fraud victims.
The attorneys have a pending class action suit in the circuit court of Miller County, Arkansas. Plaintiffs in the case are Lane's Gifts and Collectibles and Caulfield Investigations, while the named defendants include Google, Yahoo!, Lycos, AskJeeves, FindWhat.com, Buena Vista Internet Group, LookSmart, America Online, Netscape and Time Warner. Two other plaintiffs that had originally been part of the case, U.S. Citizens for Fair Credit Card Terms and Savings 4 Merchants, have apparently dropped out.
The lawsuit accuses the defendants of overcharging advertisers for pay-per-click advertising and concealing the overcharges.
The LostClicks.com site exhorts visitors to help the firm with the case, urging them to e-mail "If you have information about click fraud, have not been given answers or your money back from the search engines for suspected click fraud or you suspect click fraud and need to investigate...."
"What we'd like is for LostClicks.com to become an electronic meeting place for advertisers and individuals who are concerned about pay-per-click fraud," said Fineberg in a statement.
A recent survey by the Search Engine Marketing Professionals Organization (SEMPO) found that 45 percent of advertisers were worried about click fraud, though they hadn't tracked it much. Meanwhile, 26 percent said it wasn't a significant concern. Only 6 percent labeled click fraud as a
significant problem that they had tracked.
I sometimes think that the ad-infested web is not the same internet anymore. The one that we all came to know and love in the early nineties. I'm actually quite angry that there are no other ways to finance a popular non-profit website than putting ads on it.
In my opinion, this is the result of the lack of a decent micropayment solution.
One of my motivations for developing micropayment aggregators is helping to rid the web of ubiquitous ads. It's been sad enough to see beautiful European cities turned into mere backdrops for zillions of giant poster ads and movies turned into product-placement vehicles.
I'm not against advertising in general. I readily acknowledge that the purpose of some of the most beautiful things in life is sending a selling message (flowers, for example). But when advertising becomes a desperate measure to finance something created for totally different purpose, it is very irritating.