Google CEO Eric Schmidt Seems to Think Click Fraud No Big Deal in the Long Run

The Internet Patrol - Patrolling the Internet for You

During a discussion at Stanford University a few months ago, Google CEO Eric Schmidt reportedly indicated that he didn’t think that click fraud was a big deal in the long run. In fact, he is quoted as saying that the “perfect economic solution” to click fraud is “to let it happen.” He also called click fraud “not material”.

Kind of ironic for a company which recently spent $90 million settling a lawsuit in which it was claimed that they did not do enough to protect their advertisers from click fraud.


Now, to be fair, Google does attempt to address and head off click fraud, and during that same discussion Schmidt even indicated that Goog’s engineers consider trying to stay ahead of click fraud to be “great fun”. But still, it’s not comforting to think that the guy in charge over at Google thinks that a good way to handle click fraud would be to just let it happen.

Schmidt’s theory is that “Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen.”

Of course, during that “eventually”, advertisers are paying for fraudulant clicks. And clearly, judging by the lawsuit, some care. A lot. But some also wax philosophical about it.

No Paywall Here!
The Internet Patrol is and always has been free. We don't hide our articles behind a paywall, or restrict the number of articles you can read in a month if you don't give us money. That said, it does cost us money to run the site, so if something you read here was helpful or useful, won't you consider donating something to help keep the Internet Patrol free?
Click for amount options
Other Amount:
What info did you find here today?:

 

“This is what I’ve thought all along,” said Steve Loyola, owner and publisher of BestWebBuys.com. “Intelligent ad buyers will focus on ROI and ignore the click count. Increased click fraud will cause lower CPCs, but the overall bang for your buck is what’s really important.” But, added Loyola, “That said, Best Web Buys has scripts to cleanse our click logs before invoicing those stores that pay per click. It helps maintain goodwill and it’s just good business.”

And while Google may or may not know about “good business”, it’s pretty clear that they have a bit to learn in the goodwill department.

No Paywall Here!
The Internet Patrol is and always has been free. We don't hide our articles behind a paywall, or restrict the number of articles you can read in a month if you don't give us money. That said, it does cost us money to run the site, so if something you read here was helpful or useful, won't you consider donating something to help keep the Internet Patrol free?
Click for amount options
Other Amount:
What info did you find here today?:

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.