We admit, ‘whatevs’ is not an exact quote. The exact quote is, “Let it happen,” and it was uttered by Google CEO Eric Schmidt in March at Stanford University. Blogged by Digital Micro-Markets’ Donna Bogatin yesterday, those three little words caught fire and unleashed a torrent of discussion at Threadwatch and other sites. Many folks disdained Schmidt’s reasoning and attitude.
Here’s the thing: he’s right.
Before it gets flamey in here, let’s look at the quote in context. Schimdt was predicting what would happen if Google did absolutely nothing at all to police click fraud:
“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.”
He goes on to say that advertisers would factor losses to click fraud into the “cost of doing business.” Of course, he says, Google does “go ahead and try to detect [click fraud] and eliminate it,” since “it is a bad thing,” and, besides, “great fun” to fight.
While you might be forgiven for taking issue with this ‘what the hey’ approach to the problem (and the implication that it’s not so much a problem as an entertaining distraction), it’s difficult to argue with the substance of Schmidt’s words. Even with the most sophisticated tracking system, click fraud is a fact: savvy advertisers have to allow for its existence in ROI calculations. As much as Google and the other engines are blamed for not keeping a tighter rein on click fraud, we doubt very much that it’s possible to completely eradicate ‘fraudulent’ clicks because it’s impossible to know what the intent behind each and every click is.
Here’s the rub. Search lives in a trackable world – one where every single step of the process can be monitored. Advertisers have no excuse not to know how much they’re willing to pay to acquire a customer, and it’s each advertiser’s responsibility to manage the keywords they’re buying and the bids they’re setting to ensure that they’re receiving qualified traffic.
We’ve also heard and seen many claims that Google’s bound to be turning a blind eye to click fraud because, in the end, it puts more money in their pocket. This is just absolute foolishness. Think about it: Google’s building a multi-billion dollar company based almost exclusively on an advertising model that is cost-effective and efficient. Click fraud raises costs and inefficiencies in the market. Start pissing off your advertisers and wasting their money, and they’ll turn elsewhere. We doubt that Google is making a conscious decision to trade short-term gain for something that may, ultimately, undermine their entire system and take their growth off the tracks.
In fact (believe it or not), Google (and the other major engines) do a good job of proactively crediting fraudulent clicks back to our firm, and resolving other disputes we’ve had in a fair manner.
The problem is that this leads to a moving wave of click fraud.
Not sure what you mean by a “moving wave of click fraud,” but if you monitor your traffic and make sure not to spend money where you’re getting a lot of bad clicks, you should be able to minimize click fraud’s impact. We’ve certainly had success using that strategy for our clients.