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Wednesday, August 16, 2006

Let click fraud happen says Google chairman

Eric Schmidt made the fairly good economic argument that click fraud is self correcting and the "perfect economic solution" is to "let it happen".

Lots of click fraud means less money for the advertiser from the clicks they get, causing the advertiser to pay less per click, reducing the incentive for click fraud.

(Which then means more money for the advertiser from the clicks they get, resulting in the advertiser paying more per click, increasing click fraud. But never mind that).

But apparently he was being hypothetical. So say Google anyway as they back track as fast as they can.

4 Comments:

  • I think he's got a fair point though - in the short term it'll be more money for Google, but in the long term it'll be less money for Google.

    Ideal solution is to keep click fraud to low, but tolerable levels.

    Remember that some of these advertisers are quite loose with their idea of click fraud. Some claim that companies click on competitor's ads so that it will cost them money. This is click fraud according to them, whereas I call it hate tax.
    If I don't like a company, I'll click on a generic listing for it so that they have to pay lots of money and get no sale.

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