Good Click Bad Click: how etailers can recognize and fight click fraud

[mandy]

Click fraud has been a bone of contention between retailers and the search engines for years. Retailers say the search engines which receive the click revenue have looked the other way as unscrupulous affiliates or competitors run up bogus clicks on their ads. Search engines contend that click fraud estimates are inflated and that their systems weed out most invalid and fraudulent clicks...

However click fraud is defined, estimates on the amount of click fraud vary, ranging between 5% and 50% of clicks. A recent survey by market researcher Outsell Inc. of 407 online advertisers who spend from thousands to $10 million annually on Internet ads put the number at 14.6% of clicks in 2005, representing about $800 million in spending on fraudulent clicks. Others estimate click fraud losses as high as $1 billion and growing.

But retailers don't have to go to an affiliate network to reduce the chances of click fraud. Just by switching to a pay-for-performance pricing model, retailers can remove the strongest incentive for affiliate-generated click...

In a pay-for-performance model, also known as cost per action, a retailer pays for a click only if a certain action takes place, for example, a sale.

full article: http://www.internetretailer.com/article.asp?id=19748