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Bogus Click Scam Bigger Than You Think

WWW- Google’s proposed $90 million “click fraud” settlement may barely scratch the surface of a widespread problem some Internet experts think costs Web advertisers over $1 billion annually.

The Web giant said Wednesday that it settled a class-action lawsuit filed last year by Lane’s Gifts and Collectibles charging that it knowingly overcharged advertisers who had been victimized by bogus clicks.

Search marketing experts said yesterday that the settlement – while a welcome acknowledgement of the issue and a good business move by Google – isn’t a solution to the problem.

“Google is getting out of this on the cheap,” said search engine marketing consultant Joe Holcomb. “From a business point of view, it’s very smart.”

Despite the settlement offer, however, Holcomb said Google is continuing to skirt the fact that revenue derived from bogus clicks contributes to its revenue.

“Search engines have an incentive to let click fraud happen,” Holcomb said. “Until Google kills the problem entirely, which can be done, the company is just blowing smoke.”

The extent of click fraud – and the cost to advertisers – is unknown, in large part because Google and the other Internet companies that operate ad networks refuse to discuss the issue in anything more than the vaguest of terms.

But many search marketing experts believe that bogus clicks could cost Web advertisers over a billion dollars annually.

“$90 million is very small compared to the overall problem,” said Joseph R. Dupell, CIO of Web marketing company E-Magine Networks.

Last year, Web research firm MarketingExperiments.com found almost 30 percent of Google’s paid search traffic could be fraudulent.

 

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