Steve Rubel points to a study revealing that advertisers lost $800MM to click fraud in ‘05. That’s a lot of money.

As I said earlier, this problem could be the one really threatening the whole web economical balance. When asked about this, Eric Schmidt – the CEO of Google – discussed click fraud and explained he thinks it is a self-correcting problem:

“Eventually the price that the advertiser is willing to pay […] will decline because the advertiser will realize that these are bad clicks. In other words, the value of the ad declines. So, over some amount of time, the system is, in fact, self-correcting. […] there is a perfect economic solution, which is to let it happen.”

Link

Is it really that simple? Self-correction demands transparent information, something 1) nobody will really have (or with six months delay) 2) Google and the others has no interests to give away.

Is Google covering the shortcomings of the economical model their survival depends on?

This entry was posted on Wednesday, August 2nd, 2006 at 11:31 am and is filed under advertising, english. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.