Google CEO Eric Schmidt discussing the problem of click fraud is quoted as saying “just let it happen.” Google’s Adwords auction system is, he believes, self-correcting. His explanation is that any click fraud that is not caught and reversed will result in the decline in the amount an advertiser will pay for each click. Thus, the advertiser ends up paying the same amount.
Well, let’s examine that from an Adsense publisher’s point of view, and see if “just let it happen” sounds like a good way to deal with the problem. So, in an average day for Adwords Advertiser, there are 20 honest clicks coming to them from the publisher network. Things are happy and dandy, the Adsense Publisher gets paid 100% of the take (after Google takes whatever its percentage is out, of course). Then, one day Click Farm comes along, and clicks Adwords Advertiser’s ads 80 times. Maybe he’s paying 80 people in 80 different places to click one time per day each, sounds like a good idea right?
So, now we have Adwords Advertiser paying for 100 clicks. Well, according to what Mr. Schmidt says, the self-correcting Adwords system will reduce the amount each cilck is worth so the Adwords Advertiser isn’t out any cash. But, from Adsense Publisher’s point of view, things don’t seem so rosy. He’s now getting 20% of what he used to get. Click Farm is happy as can be, even though he’s getting a reduced value for those clicks, he’s paying his Click Farm workers a pittance anyway so any amount is a profit. Click Farm is making four times the amount that Adsense Publisher is making, and Adsense Publisher is the one sending 100% of the honest traffic.
Sounds apocalyptic for the Adsense Publisher program, but I may be missing something.