Search giants Google (GOOG) and Yahoo! (YHOO) have built huge businesses around the millions who surf the Web -- and the advertisers eager to reach them. But with companies pouring billions into pay-per-click advertising, just who is clicking on all those ads is a question keeping many marketing managers up at night. It was no shocker, then, that BusinessWeek's Oct. 2 Cover Story about the dizzying collection of scams and deceptions that inflate online advertising bills, "Click Fraud: The Dark Side of Online Advertising," struck a nerve and generated scores of online posts, e-mails, and letters.
Most respondents shared their own stories of "weird traffic," suspicious Web sites, and clicks that never convert into real customers. Others expressed surprise at the way Google and Yahoo say they have the click fraud problem under control. Some even wondered if the gold mine of pay-per-click advertising may turn out to be short-lived because of fraud concerns.
Still, more than a few dismissed the click fraud controversy (and questioned BusinessWeek's Old Media motives for investigating this New Media industry). Despite fraud, they argue, pay-per-click advertising still generates a much higher return on investment than the guesswork of offline marketing. Whether click fraud turns out to be a lasting curse or a short-term hiccup remains to be seen. In the meantime, here's a sample of what readers had to say:
None of what you exposed surprises me. I've been a Google AdWords client for several frustrating years. Like many small businessmen, I feel I have no choice. That said, I do not know if Google will go down in financial history as among the most clever business ideas or among the largest frauds ever perpetuated. But the extensive opacity that prevents meaningful explanation between invoices that always max out (to whatever monthly limit I set) and the extraordinary lack of client communication from any of these so-called searches has kept me away from investing in Google stock. -- Eric Uhlfelder, New York
The [pay-per-click] advertising business model seems strange to me. Usually, if I want to spend money on something, whoever wants to get a piece of the action has got to place a bid. I review the bids and reward the contracts to whoever gives me the best price-to-performance ratio. But in this [PPC] business, if I want to spend money on advertising, I go to Google, sign the papers, and whoever wants to bill me is welcome to do so. That just doesn't make much sense. -- Helen Shulkin, Fair Lawn, N.J.
Click fraud parallels the circulation scams in the newspaper industry and the notoriously unreliable measurement standards of television and radio, except that the Internet was supposed to be precisely measurable, one click at a time. But how can any medium measure a viewer's response, positive or negative? It is all blind faith, not science. And it's about time faith got a good shake. -- Bob Mercer (businessweek.com)
I work as a Webmaster and use Google AdWords to attract traffic to my site. Fortunately, I don't need an MBA from a top business school and specially designed software to discover what Mr. Fleischmann has been curious about for three years. I discovered something wrong the first week I started using AdWords. A lot of weird traffic rushed into the site from China. I knew something was wrong and adjusted my ad settings to only use search keywords, no content [sites]. And I [now] expose my ad only to users from my targeted markets. After that, everything worked perfect. Though the traffic dropped a lot, I know I won't have trash traffic to burden my server. -- screen name: John (businessweek.com)
Thank you for your article! SEMPO (the Search Engine Marketing Professional Organization) has been watching and measuring the industry's click fraud concern for several years now. SEMPO's mission is outreach and education about search marketing and to help sustain trust in search advertising media. The more transparency we can provide as an industry, the more easily fraudulent activity can be curtailed. -- Dana Todd, President, SEMPO
For over 10 years, I've been arguing that the search industry needs to acknowledge that click fraud is a real problem. [So] nothing in this report is a surprise to me. It just astounds me that the search engines and ad networks continue to paint a rosy picture of how they're on top of the problem. -- screen name: CPCcurmudgeon (businessweek.com)
Everybody seems to be blaming the search engines for click fraud, but I believe that in order for the problem to be mitigated, we need to focus on the fraud committers instead. After all, if someone to whom you sent a postal solicitation called your sales line 500 times with no interest in becoming a customer, would you blame the post office or the caller? -- Eric Engel, Larchmont, N.Y.
The article is one-sided. It lumps all PTR [pay-to-read businesses] and members into one group committing click fraud. We have those who are willing to be parasites if the opportunity is presented, but if the dog were bathed and groomed on a regular basis we wouldn't have the infestation. Is there a problem in PTR? Yes. Is it all of PTR? No. There are some very good sites trying to run legitimate businesses, just like the advertisers are trying to run businesses. -- screen name: concernedinptr (businessweek.com)
I think it's irresponsible for BusinessWeek to parade click fraud, a very real problem on some Web sites, as the poster child for all online advertising. Your cover design was intended to spark fear in the market, and your unnamed sources only served to fuel that fire without any evidence. -- Kathy Schwartz, Director, Internet Operations, Pocono Record, Dow Jones Local Media Group
Since I moved all my advertising from newspapers and magazines to the Internet, my business has increased almost 15% per year. To me this article sounds like a desperate attempt to regain lost advertising revenue by throwing dirt at the e-businesses. -- screen name: Businessman (businessweek.com)
To the person who says click fraud is no different than changing a channel on TV during a commercial -- you missed the point entirely. Nobody can make money sitting at home changing the channel during a TV commercial. But people sitting at home can make a very nice income click-frauding. -- screen name: mrFG (businessweek.com)
It's funny that these same companies [complaining about PPC transparency] would be willing to pay for a TV ad with no way of really tracking who watches their ad (or if anyone does at all). It seems to me they're getting a much better deal. Even the ZapMeta site's [experience] -- 1 customer for less than 400 impressions? That's amazingly good odds. TV and radio still can't even come close to touching that. That's why Google and Yahoo can dismiss their unhappy customers. -- Tim Thomas (businessweek.com)
The opportunity for fraud from almost every advertising medium has existed ever since advertising was invented. Clicks and online tracking just make it easier to measure. I'm not suggesting that every media outlet and medium is fraudulent, I'm just saying that maybe click fraud isn't that big of a deal. -- John Jantsch, Duct Tape Marketing
While it is true there is waste in every advertising medium, one must make the distinction between waste and fraud. The proper analogy would not be someone changing channels during a commercial, but rather the cable company pushing advertisements to millions of "dummy televisions" that could not possibly be viewed by a potential consumer, and the advertiser being billed for those impressions. -- screen name: JP (businessweek.com)
By Brian Grow