Wednesday, April 6th, 2005

Pay Per Click Class Action Lawsuit Initiated


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.

2 Responses to “Pay Per Click Class Action Lawsuit Initiated”

  1. Anonymous

    We are PPC advertisers with Lycos. Our monthly bill averaged about $100. I questioned the Dec, Jan, Feb and Mar 2006 clicks befcause they averaged $400 and drained our account.

    Our Lycos account executive and a Lycos customer service rep both stated that they had some partners who were fraudulently clicking keywords. I then asked for a refund or credit for these clicks.

    They both told me that Lycos does not grant refunds or credits. The funny part about this is that the next breath out of our Lycos account executive was to ask if we wanted to broaden our campaign with them.

    Of course I said no, and that we will no longer be advertising with Lycos anymore due to their refusal to refund or credit us for click fraud.

    I am looking forward to any class action suit against Lycos and any other company who has click fraud. Companies like Lycos are ruining this method of advertising. They are nothing more than thieves. Shame on them.

  2. mellissa

    Now Google Analytics is a tool that can tell you everything you desire to find out about how your visitors managed to find you. But the road here was pretty hard.

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