You may have heard that Google is facing a click fraud lawsuit. If you want all the details, this post on Search Engine Lowdown provides a link to a PDF copy of the class action complaint.

What’s click fraud? Here’s Google’s definition: “any method used to artificially and/or maliciously generate clicks or page impressions.”

How big an issue is click fraud? It depends on who you ask. On the one hand, Google downplays click fraud as “not a significant problem.” On the other hand, the company’s CFO says that click fraud “threatens our business model.” The most common figure cited among independent estimates is 20 percent. The chief executive of Click Defense, the company that filed the suit, says they’ve detected click fraud rates as high as 38 percent.

This is an issue that affects not just advertisers, of course, but also publishers. Here’s an article from WebProNews written from that perspective.

I believe the typical AdWords advertiser, paying 40 or 50 or 60 cents a click, doesn’t have to worry about click fraud. Where the action is happening is most likely in the keyword penthouse: pharmaceutical and financial keywords, for example, that bid to the higher end of the $0.05 – $100 bidding range allowed by Google.

Takeaway for marketers: Relax. Unless there’s a skeleton in Google’s closet the size of Andre the Giant, there’s no need to worry. Yet.

This entry was posted on Saturday, July 2nd, 2005 at 12:03 am and is filed under Internet Stuff, Marketing Stuff, Marketing Takeaways.