It was only a matter of time before someone took the problems associated with click-fraud to court. In February, a group of advertisers quietly filed a lawsuit against Google, Yahoo, Time Warner (AOL), Ask Jeeves, Disney, Lycos, LookSmart and FindWhat.
Led by Texarkana Arkansas Retailer Lane’s Gifts and Collectibles LLC, the plaintiffs contend that the search engines knowingly charged for fraudulent clicks, at an average rate of $0.50 per click. The group hopes to have their suit certified as a class-action lawsuit which would allow other advertisers to join.
Under a pay per click advertising program, advertisers generally pay a search engine a small fee each time a user clicks on their ad. Those willing to pay more than their competitors receive the highest placements. One of the main factors driving the growth of paid advertising is contextual distribution programs in which a search engine allows private webmasters to display topically relevant ads on their web pages with revenues from click-throughs divided equally between the search engine and the webmaster. Google’s famous AdSense program is the most prominent of such distribution models. Being able to make some money every time a site visitor clicks on a paid-link on your site is so tempting to some unscrupulous webmasters that they hire legions of ad-clickers or develop software to simulate human link-clicking activity.
Google, Yahoo and other search firms offering paid advertising are working to develop tools to detect and deter click fraud. They are also opening up by allowing developers access to Application Programming Interfaces which provide a work-lab for the creation of tools to better track a paid-advertising campaign. Nevertheless, click fraud represents a growing fear in the minds of advertisers, one that might be quantified if the suit produces hard numbers.